Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Cornwall Electric Power Bill [Lords] (King's Consent signified),

Bill read the Third time, and passed, with Amendments.

Rickmansworth and Uxbridge Valley Water Bill [Lords],

Read the Third time, and passed, with Amendments.

Land Drainage Provisional Order (No. 1) Bill,

Land Drainage Provisional Order (No. 2) Bill,

Ministry of Health Provisional Order (North Herts Joint Hospital District) Bill,

Sea Fisheries Provisional Order (No. 1) Bill,

Sea Fisheries Provisional Order (No. 2) Bill,

Read a Second time, and committed.

Oral Answers to Questions — ITALY AND ABYSSINIA.

Mr. CROWDER: asked the Secretary of State for Foreign Affairs whether he has yet received a detailed report from Sir Sidney Barton on the period immediately preceding the occupation of Addis Ababa by the Italian forces; and, if so, whether he will consider its publication, together with any written communications which have been received from foreign Powers whose legations owe some measure of their security to the activities of the British legation guard?

The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): I have now received this report and will arrange for it to be made available as a

White Paper at an early date. I am also prepared to include in the White Paper the written communications received from certain foreign Powers to which my hon. Friend refers, but it will first be necessary to obtain the consent of these Powers.

Mr. MANDER: asked the Secretary of State for Foreign Affairs what steps the Government propose to take to carry out in respect of Abyssinia, in association with other League members, the obligation under Article 10 of the Covenant to preserve against external aggression the territorial integrity and political independence of all members of the League?

Mr. EDEN: Perhaps the hon. Member will await the Debate which is to take place shortly when all aspects of the Italo-Abyssinian dispute will be under review.

Mr. MANDER: Do I understand from that that my right hon. Friend will tell us to-morrow what steps the Government intend to take to carry out our obligations under Article 10 of the Covenant?

Mr. EDEN: I am sure the hon. Member would not wish me to make my speech in advance.

Mr. MANDER: Will the right hon. Gentleman be good enough to say whether he will deal with that matter?

Mr. EMMOTT: Can nothing be done to save the League of Nations from its friends?

Mr. MANDER: Can I not have an answer?

Mr. VYVYAN ADAMS: Have the Government fully before them the plea of the Imperial statesman, General Smuts—to use his own language—that Italy must not get away with it?

Mr. DENVILLE: asked the Secretary of State for Foreign Affairs whether he is aware that the report just issued by the League of Nations Slavery Commission says that after 1932 the Abyssinian Government failed to prove that the measures promised for the abolition of slavery were being carried out; that the proportion of slaves in the Tigré territories was found by the Italian troops to be one-twelfth of the population and that the fate of 10,000 slaves


attached to Ras Desta's army was unknown; and whether he will move for investigation into this matter and place these facts before the League Assembly at Geneva on 30th June?

Mr. EDEN: Neither of the statements attributed by my hon. Friend to the Advisory Committee of Experts on Slavery in fact appears in their report. Certain statements relating to the situation in those parts of Ethiopia occupied by the Italian forces are, however, contained in a document communicated to the Committee by the Italian Government and published as an annex to the report. The Committee did not express any opinion upon the statements in this document, since, under the Assembly resolution by which the Committee was constituted, communications relating to slavery transmitted by one country and dealing with the situation in another country are required in the first instance to be communicated for observations to the country concerned. The report of the Committee is on the agenda of the next session of the Council.

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs what are, in the view of his Department, the benefits furnished by the Pact of Paris, to which reference is made in the preamble of the Treaty?

Mr. EDEN: The benefits furnished by the Pact of Paris consist for this purpose of the undertaking of the parties not to resort to war with one another in violation of its terms. The object of the provision in question was, as appears plainly from the published correspondence which preceded the signature of the Pact, to ensure that the Pact should not debar the parties to it from coining to the assistance of a party which had been attacked by another party in violation of its terms.

Mr. HENDERSON: Is it not established beyond doubt that Italy has resorted to war in order to promote a national interest in breach of this Treaty, and will not the right hon. Gentleman consult with the United States Government and the other Governments signatories to the Treaty with a view to denying Italy the benefits of the Treaty to which the right hon. Gentleman has just referred?

Mr. EDEN: I do not think the hon. Member has understood the position. Perhaps he will read the answer I have given and put a question on the Paper.

Mr. MANDER: Is it not perfectly clear that pacts of this kind are useless unless they are backed by genuine sanctions?

Mr. EDEN: The hon. Member will appreciate that he is condemning the Pact itself.

Mr. HENDERSON: Is there anything which would prevent the British Government from consulting with the other Governments signatories to the treaty with a view to making a declaration or taking up some position, having regard to the breach of the treaty by Italy?

Mr. EDEN: That is another question.

Mr. COCKS: asked the Secretary of State for Foreign Affairs whether, in the course of the Italo-Ethiopian conflict, any proposal or proposals by His Majesty's Government to impose more effective sanctions on Italy were rejected by the League of Nations; and, if so, will he give particulars of such happenings?

Mr. EDEN: His Majesty's Government have repeatedly declared their readiness to participate in any further measures of a financial and economic character which might be agreed upon.

Mr. COCKS: Does the right hon. Gentleman mean that no proposals made by the British Government have been rejected by other nations, and that therefore the failure of sanctions is not due to other nations, but to the weakness, timidity and cowardice of the British Government?

Mr. EDEN: I would not like to deprive the hon. Gentleman of any satisfaction he gets from such reasoning.

Mr. DALTON: What is asked in the question is whether any proposals by His Majesty's Government to impose more effective sanctions on Italy were rejected by the League of Nations. We have not had an answer to that.

Mr. EDEN: I think my answer covers the question.

Lieut. - Commander FLETCHER: asked the Secretary of State for Foreign Affairs whether any decision has yet


been come to as to recognising the assumption of the title of Emperor of Abyssinia by His Majesty the King of Italy?

Mr. EDEN: No, Sir.

Oral Answers to Questions — ANTI-BRITISH BROADCASTS (ITALIAN STATIONS).

Commander LOCKER-LAMPSON: asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the anti-British propaganda wirelessed from Italy to India in native languages; and what representations he will make on this matter?

Mr. EDEN: I would refer my hon. and gallant Friend to the reply which was returned to the similar question which he asked on 25th May, to which I have nothing to add.

Commander LOCKER - LAMPSON: Does not the right hon. Gentleman think that it is a very unsatisfactory state of affairs?

Mr. EDEN: I am told the effects of this broadcasting are negligible.

Oral Answers to Questions — SYRIA (ASSYRIAN SETTLEMENT).

Mr. MANDER: asked the Secretary of State for Foreign Affairs what is the present position with regard to the settlement of the Assyrians in Syria and the numbers which have been transferred, respectively, to the Ghab area and the Khabur area?

Mr. EDEN: The position remains substantially as described in reply to o, question by the hon. and gallant Member for Nuneaton (Lieut.-Commander Fletcher) on 15th May. I understand, however, that the transfer is now proceeding of the additional quota of 2,500 Assyrians whose removal from Iraq to the temporary settlement on the Upper Khabur River was approved last month by the Committee of the League Council which is responsible for the settlement of the Assyrians. There has been no change in the position in regard to the transfer of Assyrians to the Ghab area. The Committee of the League Council has been convoked for 23rd June at Geneva, and it will doubtless submit a report on its work to the Council at a very early date.

Mr. MANDER: Is it not a fact that there have been unexpected difficulties during the last few months which will considerably delay the carrying out of the scheme?

Mr. EDEN: I hope there will not be a delay but this matter is in the hands of the League Committee.

Oral Answers to Questions — SUEZ CANAL COMPANY.

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs the names of the unofficial British directors on the board of the Suez Canal Company, the dates of their appointment, the amount of remuneration paid to them annually, and the net profits of the company for the year 1934–35?

Mr. EDEN: I would refer the hon. Member to the reply given on 18th March to the hon. Member for Southwark, Central (Mr. Day), to which I need only add that the net profits of the company for the year 1935 were approximately 553,000,000 French francs.

Mr. HENDERSON: How do the profits for that year compare with the previous year?

Mr. EDEN: I am afraid I cannot say. It is a private company and has nothing to do with the Government.

Mr. HENDERSON: The right hon. Gentleman has given the figures for 1934–35; can he not give them for 1933–34?

Mr. EDEN: I cannot without notice. I have given the figures, although I have no responsibility for them, merely as an act of courtesy to the hon. Member.

Mr. SHINWELL: Does the right hon. Gentleman suggest that the Government are not interested in the Suez Canal?

Oral Answers to Questions — INTERNATIONAL AGREEMENTS.

Mr. DAY: asked the Secretary of State for Foreign Affairs particulars of any international agreements made during the previous two years by His Majesty's Government which have not been either published or laid before the House?

Mr. EDEN: All international agreements made by His Majesty's Government during the period in question have been published or laid before the House.

Oral Answers to Questions — ANGLO-EGYPTIAN CONVERSATIONS.

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs whether he has any statement to make with regard to the treaty conversations which have been taking place between British and Egyptian delegations in Cairo?

Mr. EDEN: I have nothing to add to the reply which I gave to my hon. and gallant Friend the Member for the Isle of Wight (Captain Macdonald) on Monday last.

Mr. HENDERSON: Is it correct that the conversations in Cairo have been brought to a standstill by reason of the excessive demands of the military advisers of the Government, and if so, will the right hon. Gentleman give the House an assurance that technical considerations will not be allowed to stand in the way of a satisfactory settlement—satisfactory both to Egypt and to this country?

Mr. EDEN: I would say definitely that there is not a word of truth in the first part of the hon. Member's supplementary question, and I may add that I do not think it is in the public interest that such suggestions should be made.

Mr. HENDERSON: May I ask the right hon. Gentleman whether he ever reads the leading articles in his own paper the "Times"?

Mr. EDEN: I do not possess any paper.

Mr. COCKS: Does the right hon. Gentleman think that British prestige can fall to any lower depth than it has been brought by this Government?

Oral Answers to Questions — COLLECTIVE SECURITY.

Lieut. - Commander FLETCHER: asked the Secretary of State for Foreign Affairs whether the continuance or discontinuance of sanctions has been considered in relation to His Majesty's Government's policy of collective security; and, if so, has the question been discussed with any of those States members of the League upon whom this country's policy of collective security depends?

Mr. EDEN: So far as the first part of the question is concerned, perhaps the hon. and gallant Member will be good enough to await to-morrow's Debate. As regards the second part, the question will no doubt be discussed with other Members of the League at Geneva, where the collective decision must be reached.

Mr. THURTLE: Can the right hon. Gentleman say whether the question has already been discussed with the other States?

Mr. EDEN: No, Sir.

Mr. THURTLE: Does the right hon. Gentleman's answer mean that the question has not been discussed with the other States?

Mr. EDEN: What I mean is that the decision must be taken by the nations at Geneva and not by His Majesty's Government alone.

Mr. THURTLE: May I press the right hon. Gentleman to say whether any consultations have already taken place with the other States, in regard to this matter?

Mr. EDEN: Perhaps the hon. Member would put his question on the Paper.

Lieut.-Commander FLETCHER: Is it not rather difficult to organise a collective security system, if you do not discuss it with anyone?

Mr. EDEN: We are of course ready to discuss it at Geneva and through diplomatic channels, as and when the occasion arises for doing so.

Oral Answers to Questions — ROYAL NAVY.

REPAIR STATIONS (AIR ATTACK).

Commander BOWER: asked the First Lord of the Admiralty whether in view of the vulnerability of the existing home ports of the Royal Navy to air attack from the Continent of Europe, steps are being taken to develop and equip repair stations in regions of the British Isles beyond the reach of effective air attack from the Continent?

The FIRST LORD of the ADMIRALTY (Sir Samuel Hoare): The Admiralty are giving the fullest consideration, in conjunction with the other Departments concerned, to the question of the maintenance in war of docking and repair facilities for the Fleet—both as re-


gards the defence of existing dockyards against air attack and the provision of alternative facilities.

Commander BOWER: Can my right hon. Friend give an assurance that in any decision which may be come to considerations of defence will take precedence of political and economic considerations which might, otherwise, make it undesirable to do away with some of our existing repair stations?

Sir S. HOARE: We shall certainly keep constantly in mind the paramount importance of military considerations.

RETIRED OFFICERS AND MEN (TRAINING).

Captain PLUGGE: asked the First Lord of the Admiralty what is the present policy of the Admiralty with regard to giving permission for retired officers and men of the Royal Navy to join the Territorials; what alternative means are at the disposal of retired officers and men who wish to undergo occasional training which would render their services of value to the State in the event of emergency; and whether he will review this matter on account of the many retired officers and men who are now anxious but unable to obtain occasional naval or military training of any kind?

Sir S. HOARE: In order to utilise the training of retired naval officers to the best national advantage it is necessary for the Admiralty to retain the prior claim on those who are likely to be required in an emergency, but in other cases they are given permission to join the Territorial Army. Men who have served as naval ratings are at liberty to enlist in the Territorial Army with the exception of those who, as naval pensioners or naval reservists, will be required in an emergency for service in the Navy. Training for naval officers after retirement is provided for those who are earmarked for appointments requiring such special training, and ratings of the Royal Fleet Reserve, Class B, train for one week biennially. The question is constantly under review.

Captain PLUGGE: Does my right hon. Friend not consider that machinery should be devised by which naval officers who had to retire during the period of disarmament would be able to

rejoin the Services and be of further use to the country in the present emergency?

Sir S. HOARE: I think that question raises a somewhat different issue, but I will certainly keep my hon. and gallant Friend's suggestion in mind.

NAVAL ORDNANCE INSPECTION DEPARTMENT (DISCHARGES).

Mr. LATHAN: asked the First Lord of the Admiralty whether he is aware that H. Loukes, a disabled ex-service man, of 265, Queen Mary Road, Manor Estate, Sheffield, one of the first members of the staff engaged in the Naval Ordnance Department, inspection section, Jansan Street, Sheffield, has recently been dismissed, while others junior to him and trained by him have been retained; whether regard has been paid to the fact that he was one of the few ex-service men employed; and whether he will give an assurance that this dismissal indicates no change of Government policy in regard to the employment of disabled ex-service men?

Sir S. HOARE: H. Loukes was included in a batch of men discharged from the Naval Ordnance Inspection Department recently on reduction of numbers. Those discharged were selected after careful comparison of the claims for retention of the various men affected, including their relative merits as workmen. All the men retained in the section in which Loukes was employed were ex-service men, with one exception. This discharge does not indicate any change in the policy regulating the employment of ex-service men.

Mr. LATHAN: Does it not appear rather peculiar, if it is a question of merit warranting retention, that men trained by Loukes have been retained while he has been dismissed?

Sir S. HOARE: I understand that very careful consideration was given to the claims of Loukes and the other men and that, upon the whole, it was thought necessary to make this decision.

Mr. LATHAN: Will the right hon. Gentleman be good enough to inquire into that aspect of the case to which I have drawn attention?

Sir S. HOARE: As the hon. Member has raised the point, I will certainly look into it.

MALTA (BASE).

Major OSCAR GUEST: asked the First Lord of the Admiralty whether he can make any statement regarding the future of the British naval base at Malta?

Sir S. HOARE: Yes, Sir, and I am glad to have this opportunity of contradicting rumours which have received some publicity, that Malta is to be abandoned as a naval base. The Board of Admiralty have no intention of discontinuing the use of Malta as the principal naval base in the Mediterranean and the headquarters of the Mediterranean Fleet.

Major GUEST: Is it the intention of the Government to make Malta secure and retain it as a naval base; and is the right hon. Gentleman satisfied that Malta alone meets all the needs of the Fleet in the Mediterranean?

Sir S. HOARE: I would never say that I was fully satisfied with any defence position, but what I would state categorically is that we have no intention whatever of evacuating Malta, and we shall certainly take every practicable means to make its defences secure against any possible attack.

Mr. SHINWELL: Can the right hon. Gentleman say whether the Government considered the strategic position of Malta as a naval base before they embarked on the policy of sanctions?

Oral Answers to Questions — KENYA.

Mr. MANDER: asked the Secretary of State for the Colonies whether he will give an assurance that no approval will be given to any measure granting to foreigners in any part of Kenya rights withheld from British subjects?

The SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): Yes, Sir.

Mr. LUNN: Will the right hon. Gentleman say that no privileges are given to outsiders which are withheld from the natives in Kenya?

Mr. ORMSBY-GORE: I do not know to whom the hon. Gentleman refers as "outsiders."

Mr. LUNN: Foreigners, or settlers who have gone there from any other part of the British Empire.

Mr. ORMSBY-GORE: I cannot describe British settlers as "outsiders." Under successive Governments for 30 years it has been the administrative practice to regard, not the whole of the highlands but a portion of the highlands as a field for European settlement.

Mr. LUNN: But the right hon. Gentleman would not describe even the British settlers as "natives"?

Mr. ORMSBY-GORE: Certainly not, but the natives have their own reserves.

Mr. PALING: Does this mean that no facilities will be given to Europeans to settle in the Kenya highlands which are not being given to the natives?

Mr. ORMSBY-GORE: No, it means that European settlers can settle in the area open to European settlement in the highlands, but not in the native reserves in the highlands which are set apart for natives only.

Oral Answers to Questions — PALESTINE.

LAND OWNERSHIP AND TENANCY.

Mr. S. O. DAVIES: asked the Secretary of State for the Colonies whether, having regard to the statement in the report on immigration, land settlement and development presented to Parliament in 1930, to the effect that of the 86,980 rural Arab families in the villages of Palestine 29.4 per cent. were landless in that year, he can give corresponding figures for 1935; and whether he is aware that the situation from the point of view of the fellahin has during the intervening period gone from bad to worse?

Mr. ORMSBY-GORE: The estimate to which the hon. Member refers is stated in the report to relate to families who live not directly by cultivation but by labour either in the village or outside and in many other ways, and was not intended to imply that all these families had previously been owners or tenants of land. No corresponding figure is available for 1935. From many points of view the position of the Arab fellahin has considerably improved since the issue of the report of 1930. I may mention in this


connection the protection given to tenants under the Protection of Cultivators Ordinance; measures taken to meet the problem of indebtedness, whereby the indebtedness of cultivators in the Northern District alone is said to have been reduced by at least 60 per cent.; and the reform in the system of land taxation, which has reduced taxation payable by average cultivators of cereals by as much as 70 per cent. I am quite unable to accept the view stated in the last part of the hon. Member's question.

Mr. DAVIES: Will the right hon. Gentleman make some effort to obtain the comparative figures for 1935, as there is an arithmetical as well as a human problem here?

Mr. ORMSBY-GORE: I do not see how it would be possible now that 1935 is past to make an assessment of how many Arabs were (a) employed on the land, (b) employed in industrial enterprises, (c) in villages and the like in that year. It is impossible to compile figures for 1935 comparable with those which were specially compiled for the commission in 1930.

Mr. GALLACHER: Is it not the case that the strike of Arabs is based partly on the fact that they are being driven off the land?

Mr. ORMSBY - GORE: I cannot accept that suggestion for one moment.

OFFICIALS (LEAVE).

Lieut. - Commander FLETCHER: asked the Secretary of State for the Colonies what officials of the Criminal Investigation Department and the political branch of the Palestinian administration are at present on leave?

Mr. ORMSBY-GORE: One officer of the Criminal Investigation Department of the Palestine Police, who has been ill, is on sick leave, and three administrative officers, one on sick leave.

ARAB PETITIONS.

Mr. GRAHAM WHITE: asked the Secretary of State for the Colonies the nature of the representations submitted by the Arabs in Palestine to the Mandates Commission?

Mr. ORMSBY-GORE: Representations have been submitted to the Permanent Mandates Commission on behalf of the Palestine Arab party on the subjects of the form of government in Palestine, Arab education, Jewish immigration, land policy, and the Huleh Concession, and on behalf of the (Arab) National Medical Association on the number of Jewish medical practitioners in Palestine. The third petition referred to by the Under-Secretary for Foreign Affairs in his reply on 29th May was a private petition by Mr. Ali Hassan el Yafawi.

Mr. LUNN: Have the Permanent Mandates Commission submitted to the right hon. Gentleman any decision upon this matter?

Mr. ORMSBY-GORE: No, Sir.

Mr. GALLACHER: As there is a group of Arabs arriving in London to-day, will the Minister make arrangements to meet these Arabs and get a statement from them?

Mr. SPEAKER: That is another question.

Oral Answers to Questions — HIS LATE MAJESTY KING GEORGE (MEMORIALS, COLONIES).

Mr. CREECH JONES: asked the Secretary of State for the Colonies whether, in promoting schemes for the setting up of memorials to His late Majesty King George V in His Majesty's Dependencies, His Majesty's representatives will be instructed to give preference to schemes such as that proposed for Uganda, for the establishment of technical institutions, which will be of lasting value to Africans?

Mr. ORMSBY-GORE: No, Sir; I am not prepared to give instructions of the kind suggested, but I can assure the hon. Member that, when this or similar schemes reach me from Colonial Governments, they will receive my most careful and sympathetic consideration. I think it important that the form of memorial to His late Majesty should be decided as far as possible locally in accordance with public opinion in each Colony.

Mr. LUNN: Will the right hon. Gentleman see that before the natives are taxed to provide any memorial they are consulted and give their approval to such taxation?

Mr. ORMSBY-GORE: The hon. Gentleman knows sufficient of the immense range of the forms of Colonial administration to know that what he suggests would be rather difficult to operate in every case.

Oral Answers to Questions — TRINCOMALEE (WORKERS' STRIKE).

Mr. MAXTON: asked the Secretary of State for the Colonies whether he is able to give any information as to the recent strike of workers on Government work at Trincomalee?

Mr. ORMSBY-GORE: The Governor has telegrahed that the strike at Trincomalee occurred among the employés of a contractor employed by the military authorities. There was no trouble in the naval yards. I await a further report by mail.

Oral Answers to Questions — MALARIA.

Mr. MATHERS: asked the Secretary of State for the Colonies whether action is being taken in any of His Majesty's Dependencies following on the recommendations made at the Pan-African Health Conference recently held in Johannesburg for the combating of malaria?

Mr. ORMSBY-GORE: As the Prime Minister informed the hon. Member on 11th May, certain proposals of the Pan-African Health Conference were being submitted to the Council of the League of Nations by the Health Committee. I understand, however, that the proposals for combating malaria have not yet been considered by the special Malaria Committee of the Health Section.

Mr. MATHERS: Has the right hon. Gentleman noticed that malaria is described as being in effect a poverty disease and that the economic standing or the natives is a primary cause of malaria, and will he act in that sense?

Mr. ORMSBY-GORE: The primary cause of malaria is being bitten by a mosquito, and having had it myself in the tropics, I would not call it a poverty disease.

Mr. MATHERS: Does the right hon. Gentleman deny the statement that is made in the report from which I have taken this question?

Mr. ORMSBY-GORE: As a scientist, yes.

Oral Answers to Questions — ROYAL AIR FORCE.

CONTRACT (MESSRS. ROOTES SECURITIES, LIMITED).

Mr. HARDIE: asked the Under-Secretary of State for Air whether the firm of Rootes to whom contracts may be given is the same firm as that called Rootes Properties, Limited, or Rootes Securities, Limited, or Rootes, Limited?

The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): The organisation with which the contract will be made is Rootes Securities, Limited.

Mr. HARDIE: What was the reason for only two firms being chosen, as mentioned in the speech on 29th May, when the House was closing for the Whitsuntide holidays and no time was given for discussion? Now that I see the Minister in his place, will he come forward with some information?

Sir P. SASSOON: A great many more than two firms were consulted.

Mr. HARDIE: But the only two names mentioned in that speech are those of these two firms, and we on this side would like to know what is meant by the fact that this took place without this House having the slightest information and the matter being dealt with on a day when there was no possibility of a vote or a full discussion. You are burking something; what is it?

Sir P. SASSOON: I do not quite understand the hon. Member.

Mr. McGHEE: asked the Under-Secretary of State for Air the technical qualifications of the directors of Messrs. Rootes with whom negotiations are in progress for the production of aero engines?

Sir P. SASSOON: Rootes Securities, Limited, control a group of well-known automobile firms, and the manufacturing experience and technical ability of the staff of these firms will be enlisted for the production of aero engines.

Mr. McGHEE: Is it not true that Messrs. Rootes are purely financiers and not technical engineers at all?

Sir P. SASSOON: No, they have ample engineering experience.

Mr. HARDIE: The statement is that they employ certain experienced people, but the question asks what are the technical qualifications of these men who are around the Minister himself, and what technical qualifications has the right hon. Gentleman himself to know whether these technical men are themselves fully qualified to advise him? Is this not another ramp, the same as in 1914?

COLINDALE AND REDHILL HOSPITALS.

Mr. McENTEE: asked the Under-Secretary of State for Air whether he is aware of the serious consequences to patients of the Colindale Hospital arising from the Royal Air Force flying and searchlight operations in the vicinity of the hospital, sometimes proceeding for 12 hours and as late as midnight, and especially near the west side of the aerodrome where the Oolindale and Redhill Hospitals are situated; that the hospital inmates need rest and quietness; and that the medical staff have sometimes to suspend their stethoscopic work because of the overhead noise; and whether he will take steps to secure the minimisation at the earliest possible moment of the activities complained of?

Sir P. SASSOON: I am aware that complaints have been made in regard to the flying of Royal Air Force aircraft in the vicinity of the Colindale Hospital, and the Air Ministry has already issued instructions that pilots are to avoid as far as possible taking off and coming in to land over the hospital, particularly at night. I hope that these steps will materially reduce the inconvenience. At the same time it will, I am sure, be appreciated that the Royal Air Force expansion programme inevitably involves a considerable increase of flying activity, and despite the restrictions placed on pilots a certain amount of inconvenience is unavoidable if the efficiency of the Air Force for defence purposes is to be maintained.

Mr. BERNAYS: Can my right hon. Friend say what progress is being made in the provision of silencers for military aeroplanes?

Mr. SPEAKER: That is a rather different question.

SINGAPORE.

Mr. DAY: asked the Under-Secretary of State for Air whether the air

base at Singapore is now considered complete or whether any further work or expenditure is required on it, and what is its cost to date; and what is the normal strength of the Air Force generally maintained there?

Sir P. SASSOON: The Royal Air Force base at Seletar is being extended. The total expenditure incurred upon the base to date, including that in respect of the work so far done on the extension, is approximately £825,000. The present normal strength is four squadrons, and in addition a small volunteer Air Force has lately been established by the Straits Settlements Government.

Mr. DAY: Is shore training taking place there?

Mr. MONTAGUE: Is there any truth in the newspaper statement that the Government are now considering arrangements for an alternative air base at Cape Town?

Sir P. SASSOON: I do not think that arises out of this question.

LIFE INSURANCE (OFFICERS).

Sir ASSHETON POWNALL: asked the Under-Secretary of State for Air whether the Air Ministry has under consideration any scheme by which officers of the Royal Air Force can be given the opportunity of insurance on advantageous terms?

Sir P. SASSOON: This matter is periodically reviewed by the Life Offices Association, acting for the insurance companies, in consultation with the Air Ministry, and material reductions have been made by the companies in premiums covering flying risk. A further such review is now in progress.

AIRCRAFT MANUFACTURE (PROFITS).

Mr. ROSTRON DUCKWORTH: asked the Under-Secretary of State for Air whether the arrangements of the Government for limiting profits on the manufacture of aircraft allow ample provision for dealing with the obsolescence and replacement of plant and the promotion of research?

Sir P. SASSOON: All proper regard will be had to legitimate and reasonable expenditure on the objects mentioned by my hon. Friend.

Mr. DUCKWORTH: Does not the right hon. Gentleman agree that research should be made soon, and that adequate allowance for production costs should be made—

HON. MEMBERS: Speech!

Oral Answers to Questions — GOVERNMENT CONTRACTS.

Miss WILKINSON: asked the Under-Secretary of State for Air what proportion of all orders placed within the last six months by the Air Ministry were allocated to the north-eastern area; and what steps are being taken to increase the proportion?

Mr. DENVILLE: asked the Under-Secretary of State for Air what proportion of orders during the last six months have been allocated by or under his Department to the north-east coast; and what steps are being taken to increase the proportion compared with other parts of the country?

Mr. SEXTON: asked the Under-Secretary of State for Air what percentage of the total value of orders placed by the Air Ministry for the years 1934 and 1935, respectively, has gone to the Special Areas of Wales, the Special Areas of north-eastern England, and the Special Areas of Scotland?

Sir P. SASSOON: I would refer the hon. Members to the reply which I gave on Monday to my hon. Friend the Member for Belfast, South (Mr. W. John Stewart). In placing orders preference is given, other things being equal, to the scheduled Special Areas on Tyneside and elsewhere.

Miss WILKINSON: asked the Prime Minister whether, in view of the serious unemployment in the north-eastern area, he will advise contract-placing Departments of the Government to take into consideration, when placing contracts, the desirability of reviving the industries in this and similar areas, so that the other-things-being-equal clause shall not operate in a merely passive way?

The PRIME MINISTER ( Mr. Baldwin): Government Departments are fully aware of the desirability of placing orders in areas suffering from prolonged and severe unemployment, and it is for this reason that it is their practice to give special consideration, other things

being equal, to firms working in those areas. It is anticipated that the contracts to be placed under the Government programme of making good defence deficiencies will result in considerable orders being placed in the north-eastern and other areas suffering from prolonged and severe unemployment; and I cannot accept the suggestion that the contracting Departments have done or are doing nothing to assist these areas.

Miss WILKINSON: Is the right hon. Gentleman aware that the answer given by one of his colleagues was that only 1 per cent. of the orders placed by his Department have been placed in the North-East; and is it not a fact that this "other-things-being-equal" clause gives no advantage to the depressed areas as against those which are working full time and are thereby able to reduce working costs?

The PRIME MINISTER: I am not sure that I can assent to what the hon. Member said in the latter part of her supplementary question. I have given a plain statement of fact about orders that will be placed in connection with making good the deficiency programme. In order to draw conclusions about the 1 per cent. of the orders, one must know something about the class and the bulk of the orders. I think that most Departments have very few orders to give.

Miss WILKINSON: asked the Minister for the Co-ordination of Defence what proportion of all orders placed since his taking office have been placed in the North-Eastern area; and whether he is taking into consideration increasing the proportion of orders so placed?

The MINISTER for the CO-ORDINATION of DEFENCE (Sir Thomas Inskip): As regards the first part of the question, I regret to say that to obtain information in the form desired by the hon. Lady would involve an incommensurate amount of time and labour, for the reason that the records either of contracts or sub-contracts are not normally kept by reference to the geographical areas in which orders are placed. As regards the second part, the policy of the Government is that preference shall be given, other factors being equal, to the special and distressed


areas, and this, of course, applies to the North-Eastern area.

Miss WILKINSON: Is not the second part of the right hon. Gentleman's reply a flat contradiction of the first part, because if the first part takes no notice geographically of the distribution of orders how can he then know whether, other things being equal, geographical preference is given?

Sir T. INSKIP: The reference to "other things being equal" applies to a single specific order. The hon. Lady, in the first part of her question, asked for the sum total of such orders, and that is the information which I cannot obtain without a great deal of inquiry.

Mr. BERNAYS: Is it not a fact that the hon. Lady has voted against every provision for the rearmament of this country?

Mr. HARDIE: asked the Minister for the Co-ordination of Defence whether, when he gave consideration to the building of a very large factory for frames and engines, he had in mind the many factories with ample accommodation scattered over the country, and also the highly-skilled men in well-equipped engineering works who are on short time, and some districts where the men are unemployed; and what were the grounds for his decision?

Sir T. INSKIP: I am aware that there are a number of empty premises in various parts of the country. In the case of the manufacture of aircraft, to which, I understand, the hon. Member refers, it is essential to enlist the assistance of substantial firms with experience of the class of work required and of quantity production by up-to-date methods. In so far as it is possible to bring special or distressed areas within the ambit of the Government's defence plans, no effort is being spared to do this.

Mr. HARDIE: Why does the Minister think it necessary to go to the expense of building a special place? Can he not remember what took place during the last War? Was the evidence we had following on the cessation of hostilities not sufficient to convince anyone of the tremendous blunders that were made, and that while the men were being blown

into bundles of bloody rags "rampers" in this country were becoming million-aires? That is what is happening now.

HON. MEMBERS: Speech.

Mr. JENKINS: asked the Minister for the Co-ordination of Defence whether an agreement has been reached between the Government supply departments and the executive council of the British Iron and Steel Federation when placing orders for steel with regard to giving special consideration to the Special Areas?

Sir T. INSKIP: The Government supply departments place few direct orders for steel, the greater part of their consumption of this commodity being in the form of finished or partly-finished articles, where the raw material is obtained by the contractor manufacturing the article from the sources of supply open to him under the prevailing market conditions. As regards the small supplies of steel that are purchased direct by Government Departments, the policy of the Government is that preference is given to supplies from the Special Areas, provided all other factors are equal.

Oral Answers to Questions — HERR VON RIBBENTROP.

Mr. ELLIS SMITH: asked the Under-Secretary of State for Air whether permission was given to Air Marshal Sir Edward Ellington, Chief-of-Staff of the Air Force, to meet Herr Von Ribbentrop on the 1st, 2nd, and 3rd June?

Sir P. SASSOON: Sir Edward Ellington met Herr Von Ribbentrop as a fellow-guest in a private house. Their meeting had no political significance, and no question of permission arose.

Mr. SMITH: Does the right hon. Baronet consider it desirable that people in high places in His Majesty's Forces should be allowed to do what the rank and file are not allowed to do?

Mr. SMITH: asked the Prime Minister whether he can inform the House of the purpose of the visit of Herr Von Ribbentrop to London and Belfast during the first week of June?

The PRIME MINISTER: I have no information other than what has appeared in the Press from which I understand that the visit was a private one.

Mr. SMITH: Is there any connection between the visit of Herr Von Ribbentrop and the man who presided at a meeting held the other night, and the statement made by the Chancellor of the Exchequer on that occasion?

Mr. THURTLE: Will the Prime Minister consult with the Minister for Air in order to find whether there is any significance in the interview which took place between the Chief of Staff of the Air Force and Herr Von Ribbentrop?

The PRIME MINISTER: I should like to say here that I cannot understand the objections that have been raised. My own view in the present state of Europe is that all these social and friendly meeting between such men are wholly beneficial.

Mr. SMITH: I beg to give notice that at the end of Questions I shall, with your permission, Sir, raise this matter as a question of urgent public importance.

Oral Answers to Questions — AIR SERVICE (JOHANNESBURG CAPETOWN).

Mr. LYONS: asked the Undersecretary of State for Air whether he will indicate the number of aircraft in operation on the Johannesburg-Capetown air service and their country or countries of origin?

Sir P. SASSOON: No information is available as to the number of aircraft in operation on the Johannesburg-Capetown air service, which is a matter for His Majesty's Government in the Union. I understand that all the aircraft at present being used by South African Airways are of German manufacture but that the company is shortly taking delivery of some British machines.

Mr. LYONS: Does my right hon. Friend agree that it is very unsatisfactory that this fundamental link in Empire communications should be covered by foreign made aircraft, and does he think it right that a Government subsidised company giving through bookings over this line should allow part of the route to be covered by foreign machines? Owing to the unsatisfactory nature of the reply, I beg to give notice that I will raise this matter at the earliest moment.

Oral Answers to Questions — ELECTRICITY DISTRIBUTION (COMMITTEE'S REPORT).

Commander BOWER: asked the Minister of Transport whether he is now in a position to state when the report of the Committee on Electricity Distribution will be published?

The MINISTER of TRANSPORT (Mr. Hore-Belisha): Yes, Sir. I hope that it will be printed and published next week.

Oral Answers to Questions — TRANSPORT.

TRAFFIC CONGESTION, CITY OF LONDON.

Rear-Admiral Sir MURRAY SUETER: asked the Minister of Transport whether he will endeavour to arrange with the Corporation of the City of London to widen Thames Street so as to reduce the dangerous congestion of traffic in Eastcheap, King William Street and Cannon Street; and, if necessary, will he ask for Parliamentary powers to widen Thames Street?

Mr. HORE-BELISHA: The possibility of widening Thames Street is included in the highway development survey of Greater London now in progress.

GREAT WEST ROAD.

Brigadier-General SPEARS: asked the Minister of Transport whether the erection of a central division has reduced accidents in the Great West Road; and whether he can make any statement as to when cyclists' tracks to either side of the present roadway will be constructed?

Mr. HORE-BELISHA: The answer to the first part of the question is in the negative, and to the second part, that the Middlesex County Council expect to commence construction of cycle tracks in August next. There can be no doubt that the present lay-out of the road is unsatisfactory, and the county council have the matter before them.

Brigadier-General SPEARS: Is there not any possibility of having something done before next August?

Mr. HORE-BELISHA: We are all very anxious to have something done, but the Middlesex County Council have undertaken to do it in August, which is not too far ahead.

Mr. GEORGE GRIFFITHS: Is not August too far away, because we have been waiting for the spring?

TRAFFIC LINES.

Brigadier-General SPEARS: asked the Minister of Transport whether he will urge local authorities wherever possible to mark all main roads with white lines, dividing the roadway into three or four lanes, so as to encourage traffic to keep to the nearside, except when overtaking?

Mr. HORE-BELISHA: The special attention of highway authorities has already been drawn to the use of white lines on carriageways, and another circular will shortly be issued dealing with this and other matters.

Captain PLUGGE: Will the Minister also urge the use of signals painted on the surface of the road utilising the parallax type of lettering?

Mr. HORE-BELISHA: No, Sir.

LEVEL CROSSINGS.

Mr. TINKER: asked the Minister of Transport the number of level crossings, railways, there are in this country; and what steps his Department is taking to remove them?

Mr. HORE-BELISHA: There are some 1,050 railway level crossings on classified roads in Great Britain, the total number of railway and colliery crossings on classified and unclassified roads being some 4,560. I am ready to entertain applications from highway authorities for grants at the rate of 75 per cent. of the approved net cost of eliminating level crossings on classified roads or on other roads of substantial through traffic value.

Mr. TINKER: Has the Minister power to override the various objections of the railway authorities to the removal of crossings?

Mr. HORE-BELISHA: No; I am not a highway authority. We simply sit at the receipt of custom.

TRAFFIC SIGNS.

Mr. TINKER: asked the Minister of Transport whether he is aware that there is some doubt as to the efficiency of the traffic sign which reads Halt at major road ahead; and will he have inquiries made as to whether the word "Stop" in place of "Halt" would be more definite?

Mr. HORE-BELISHA: The Departmental Committee on Traffic Signs advocated the adoption of a "Halt"

sign, presumably interpreting this word in its military and peremptory sense. I am reluctant to believe that the word is not generally so understood. Further, the sign is illustrated and its meaning explained in the Highway Code.

Mr. TINKER: If I send to the right hon. Member particulars of several instances in which difficulties have arisen in the courts of justice on this point, will he consider them?

Mr. HORE-BELISHA: I shall be glad to consider anything which the hon. Member sends me if the difficulties relate to difficulties in the minds of the persons looking at the signs.

STATIONARY VEHICLES.

Mr. TINKER: asked the Minister of Transport whether he has considered the danger of accidents arising when vehicles draw up and stop for any lengthy period on each side of the road so as to be opposite each other, and thereby cause vehicles to converge when they come to and pass them; and will he examine this question to see whether anything can be done to lessen the danger?

Mr. HORE-BELISHA: Yes, Sir. The roads are provided at public expense for free passage and the prevention of obstruction upon them is a matter for the police.

Mr. TINKER: Would not some instructions from the Department be helpful in this matter, because again I have had experience of this difficulty, and I should like to draw the Minister's attention to cases where no notice is being taken of this rule? I have seen several cases where accidents have nearly happened owing to the failure to observe the rule.

Mr. HORE-BELISHA: The law is clear on the subject, and so is the Highway Code.

MOTOR VEHICLES (REGULATIONS).

Mr. PARKINSON: asked the Minister of Transport the number of examiners in the service of the Ministry for the purposes of the Road Traffic Acts; and whether, in view of the continued and frequent breach of Section 19 of the Road Traffic Act, 1930, he will augment the number of examiners to enable a more rigorous inspection of records' to be undertaken?

Mr. HORE-BELISHA: The number of examiners employed under the various Sections of the Road Traffic Acts is 474, and in addition there are the services of the police. I will consider whether that part of the staff which is devoted exclusively to examining records and consists of about 40 examiners could, with advantage, be strengthened.

Mr. PARKINSON: asked the Minister of Transport whether he is aware that the non-observance of Section 93 of the Road Traffic Act, 1930, by a number of road transport undertakings is placing law-abiding employers at a disadvantage in trading; and what steps he proposes to take to give complete effect to the decisions of Parliament in this matter?

Mr. HORE-BELISHA: Representations on this subject have been made to me and to my right hon. Friend the Minister of Labour by the National Joint Conciliation Board for the Road Motor Transport Industry (Goods) and these representations are at present receiving our consideration.

DE-RESTRICTED ROADS (SCHOOLS).

Miss RATHBONE: asked the Minister of Transport whether he will review all the orders he has made to de-restrict roads in built-up areas, in view of the recommendation in the report on road safety among school children that the proximity of a school should be taken into account when fixing a speed limit is under consideration?

Mr. HORE-BELISHA: I have already directed the attention of local authorities to this report, and am only too ready to consider how the safety of school children can be provided with special reference to particular conditions in any given place.

PROPOSED HIGHWAY (LONDON-GLASGOW).

Mr. E. SMITH: asked the Minister of Transport whether he has considered the copy sent to him of a scheme prepared by the surveyor of a local authority for a proposed great highway to be constructed from London to Glasgow; and, if so, does he intend to consider the proposal?

Mr. HORE-BELISHA: I saw the proposal for this road estimated to cost £40,000,000. My conclusion is not favourable.

MOTOR DRIVING TESTS.

Mr. BENJAMIN SMITH: asked the Minister of Transport whether, in view of the fact that when carrying out 16 driving tests per day, together with the consequential clerical work, driving examiners are being subjected to a severe strain, he will consider reducing the amount of work expected in order that the tests may be efficiently carried out both in the interest of the examiners and of the public; and whether he will also consider increasing the number of examiners so that arrangements can be made for the staff to have a holiday during the summer?

Mr. HORE-BELISHA: The daily average number of tests carried out by each examiner is nine, but driving examiners, like other public servants, sometimes suffer by irregularity in the pressure of work.

ROAD ACCIDENTS.

Mr. LEWIS: asked the Minister of Transport the average number of per sons killed or injured for each 100,000 of the population of Great Britain during the 23 weeks ended 6th June, 1936, and also the corresponding number for the 23 weeks ended 8th June, 1935?

Mr. HORE-BELISHA: The approximate average numbers of persons killed or injured in road accidents per 100,000 of the population in Great Britain during the 23 weeks ended 6th June, 1936, and 8th June, 1935, respectively, were 192 and 188.

Mr. LEWIS: Do not those figures show that the time has now come when the movements of pedestrians in the roadway should be regulated under penalties in the same way as the movements of vehicles?

Mr. LEVY: Does not the Minister think the time has arrived to see that all vehicles over two years old should have a certificate of efficiency before they are allowed on the roads?

Mr. LEWIS: May I have an answer to my question?

ADVISORY COUNCIL.

Mr. BENJAMIN SMITH: asked Minister of Transport the number of meetings held by the Transport Advisory Council to deal with the question of the co-ordination of transport; and when a report may be expected from the council on this matter?

Mr. HORE-BELISHA: The Transport Advisory Council was established to advise the Minister, and it would be prejudicial to a proper relationship if I were to give public accounts of their proceedings.

Mr. SMITH: Under Section 46 of the Act of 1933 is there not a duty imposed on this Advisory Council to advise the Minister on the co-ordination of traffic? If so, what meetings have been held, what advice has been tendered, and when will the report be published?

Mr. HORE-BELISHA: I have Section 46 of the Act before me. The council was established for the purpose of advising the Minister in connection with the discharge by him of his functions, and I hope the hon. Member will appreciate that it is not usual to try to draw a distinction between a Minister and his advisers. Those gentlemen are giving their services voluntarily, and have had a considerable number of meetings, but they attend those meetings upon the understanding that the proceedings are private, and are in the nature of advice to myself.

Mr. SMITH: The hon. Gentleman will know, I hope, that I do not wish to draw any invidious distinction between a voluntary council and the duty imposed on a Minister, but what I have asked is whether, in fact, this council has considered this subject and reported to him, and whether he will inform the House of the nature of the reports?

Mr. HORE-BELISHA: There is nothing I desire to conceal from the hon. Member. The council have met on many occasions, but I do not wish to institute a practice of rendering accounts of their proceedings or of the number of meetings they have held.

Oral Answers to Questions — DEFENCE.

FOODSTUFFS.

Commander BOWER: asked the Minister for the Co-ordination of Defence whether steps are being taken to ensure that, in the event of a European war, cargoes of foodstuffs and raw materials, at present dependent on the special disembarkation, storage, and distribution facilities of the Port of London, can be dealt with at western ports?

Sir T. INSKIP: A committee has been dealing with this question among others connected with the distribution of imports, and plans are being prepared.

Commander BOWER: Is it not a fact that, were we to be deprived of the facilities of the Port of London, it would be impossible to disembark and distribute our essential foodstuffs, and can my right hon. Friend give an assurance that this will be regarded as a matter of most urgent importance?

Sir T. INSKIP: I can assure my hon. and gallant Friend that I am well aware of the urgency of such questions that he raises. If we were deprived of the advantage of the Port of London other facilities would be available.

Sir JOSEPH LAMB: Does not my right hon. Friend realise the desirability of producing as much as we can at home?

Oral Answers to Questions — GASOMETERS (AIR ATTACK).

Captain PETER MACDONALD: asked the Minister for the Co-ordination of Defence whether he is making any inquiry into the vulnerability of gasometers to attack from the air and the damage which might be caused in such circumstances; and, if not, whether he will consult the gas industry with regard to this matter at an early date?

Sir T. INSKIP: Yes, Sir, and after consultation with the London gas companies a memorandum is being prepared upon which further consultation with the professional and commercial bodies concerned will take place.

Oral Answers to Questions — OIL SUPPLIES.

Brigadier-General SPEARS: asked the Minister for the Co-ordination of Defence whether he will consider the provision of bomb-proof reservoirs for oil storage, on a scale sufficient to maintain a supply of oil in this country adequate to our needs in time of war?

Sir T. INSKIP: My hon. and gallant Friend may be assured that the Standing Sub-Committee of the Committee of Imperial Defence to which my right hon. Friend the Prime Minister referred in the reply he gave on 26th February last to my hon. Friend the Member for Paisley (Mr. Maclay) is considering all practicable means for ensuring the maintenance of supplies of oil for this country in time of war.

EMPIRE CONTRIBUTIONS.

Mr. SHINWELL: asked the Minister for the Co-ordination of Defence the amount contributed per head of population for the purposes of Empire defence by the United Kingdom, Australia, Canada and South Africa, respectively; whether he is satisfied that all parts of the Empire are making an adequate contribution in accordance with possible requirements; and whether he is in communication with the Dominion Governments in respect of this matter?

Sir T. INSKIP: As regards the first part of the question, I would invite the hon. Member's attention to the reply given by my right hon. Friend the Chancellor of the Exchequer to the hon. Member for Newton (Sir R. Young) on 19th May. It will be appreciated that so far as the Dominions are concerned their expenditure for defence purposes is a matter entirely for His Majesty's Governments in the respective Dominions, with whom constant touch is maintained on defence as on other matters.

Mr. SHINWELL: Will the right hon. Gentleman reply to the part of the question which deals with adequate contributions from the Dominions?

Sir T. INSKIP: I think the last part of my answer does deal with that point. I say that those matters are entirely within the province of His Majesty's Governments in the respective Dominions.

Mr. SHINWELL: But will the right hon. Gentleman be a little more explicit and say whether, in the opinion of the Government here, the Dominion Governments are making an adequate contribution to Empire defence?

Sir T. INSKIP: It is no part of my duty to express opinions in this House as to the performance of their duties by His Majesty's Governments in the Dominions.

Mr. SHINWELL: Then why does the right hon. Gentleman occupy the position of Minister for the Co-ordination of Defence?

FLEET AIR ARM.

Captain HAROLD BALFOUR: asked the Minister for the Co-ordination of Defence whether, in view of the question of the control of the Fleet arm of

the Royal Air Force, he will consider publishing, in whole or summarised, the findings of the Colwyn Committee, which impartially investigated the respective Air Ministry and Admiralty positions?

Sir T. INSKIP: No, Sir. I understand that the report was a Cabinet document, and that it has been stated previously that for that reason it could not be published.

ROYAL PARKS (WIRELESS CONCERTS).

Mr. DAY: asked the First Commissioner of Works whether, for the amusement of the public when there are no band fixtures in the summer, he will consider the introduction of wireless concerts in the Royal parks?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): I have been asked to reply. The First Commissioner is obliged to the hon. Member for his suggestion, but does not think that its adoption would be generally desired.

Mr. DAY: Is the Minister aware of the success of this suggestion in Continental cities and abroad?

Mr. PETHERICK: Would he also bear in mind that there are still a few people left in the country who prefer the song of the birds to entertainment music?

Mr. HOLDSWORTH: Arising out of the first reply of the Minister, may I ask if there will be intervals for questions if these concerts take place?

Mr. V. ADAMS: Would these concerts be limited to the long summer evenings, since there are always plenty of amusements by day?

CRIMINAL TRIALS (PROCEDURE).

Mr. CASSELLS: asked the Attorney-General, having regard to the impossibility of obtaining a jury unfamiliar with the earlier findings of the Budget Tribunal, he is prepared to recommend legislation applicable to criminal trials in England, bringing the same into line with that at present in existence in Scotland?

The ATTORNEY-GENERAL (Sir Donald Somervell): I presume that the hon. Gentleman is referring to the pro-


ceedings in a criminal trial which takes place before committing justices. The procedure of the Budget Tribunal was quite different from the proceedings before committing justices. The Budget Tribunal made express findings of fact, and further, the evidence was not restricted to evidence admissible against definite persons charged with a specific offence. The committing justices make no findings of fact but determine only whether or not there is a case proper to be sent for trial elsewhere, and objections to inadmissible evidence can be made before them. With regard to the last part of the question, the procedure in Scotland is wholly different from that in England, and without suggesting any criticism of the Scottish procedure, I am not prepared to recommend legislation substituting that procedure for our own.

Mr. CASSELLS: With the legal procedure as it presently stands, would the Attorney-General consider that—

Mr. SPEAKER: The hon. Gentleman appears to be reading a carefully prepared supplementary question, which is out of order.

Mr. MATHERS: Does the Attorney-General suggest, in the light of the procedure in England in regard to murder trials, that he can criticise Scottish practice?

The ATTORNEY-GENERAL: The last thing I would desire to do is to criticise Scottish practice, with which, indeed, I am not perfectly familiar.

Mr. CASSELLS: Does the Attorney-General suggest that it is possible, with the legal procedure as it stands in England to-day, to have an unbiased jury sitting on a murder trial, as has been suggested by the hon. Member for Linlithgow (Mr. Mathers)?

The ATTORNEY-GENERAL: I would certainly repudiate any suggestion that juries who sit on murder trials in England are not capable of bringing unbiased minds to bear. I am not aware of what the hon. Gentleman has in mind, but if he can make a practical suggestion which will combine the advantages of publicity with the advantages of privacy, I shall be prepared to consider it.

Oral Answers to Questions — HOUSING (LLEYN RURAL DISTRICT).

Major OWEN: asked the Minister of Health how many demolition orders have been made by his Department at the request of the Lleyn Rural District Council; and how many houses have been built by that council under the various Housing Acts?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): My right hon. Friend assumes that the first part of the hon. Member's question refers to clearance orders made under the Housing Act, 1930. No such orders have yet been received in the Department from the Lleyn Rural District Council, but my right hon. Friend is informed that orders comprising 94 houses will shortly be submitted, and that proposals for the erection of houses under the Housing Acts, 1930 and 1935, are under consideration.

Major OWEN: In view of the urgent need of houses in those rural areas, will the hon. Gentleman use as much pressure as possible upon this council to proceed with this very important work?

Mr. G. GRIFFITHS: Is it not a fact that in the main urban districts, this district has the highest tuberculosis mortality?

Oral Answers to Questions — CONTRIBUTORY OLD AGE PENSIONS.

Mr. GUY: asked the Minister of Health the number of married and unmarried women, respectively, who are in receipt of the contributory old age pension between 65 and 70?

Mr. SHAKESPEARE: On the latest figures available, the total number of women in receipt of contributory old age pensions between the ages of 65 and 70 was 295,901, of whom 210,228 were married women entitled on the insurance of their husbands. Information is not available as to the marital status of the remaining 85,673, who were entitled on their own insurance.

Oral Answers to Questions — MATERNAL MORTALITY.

Mr. LEONARD: asked the Minister of Health whether he is aware that, following the decision of Rochdale doctors to send all abnormal maternity cases to hospital, the maternal death rate has


been reduced by 60 per cent.; and will he consider the desirability of urging an extension of this practice?

Mr. SHAKESPEARE: My right hon. Friend is aware that there has, happily, been a reduction in the maternal mortality rate in Rochdale which is, he is advised, due to the operation of a number of factors. It has been the practice of my Department for many years to urge the provision of hospital beds for abnormal maternity cases.

Mr. LEONARD: Is the hon. Gentleman aware that the practice referred to in the question is universal in Holland, where there is an exceptionally low maternal death rate, and if so, does he not consider it desirable to adopt the practice widespread in this country?

Mr. SHAKESPEARE: I think it is universal in this country as well.

Oral Answers to Questions — HERR VON RIBBENTROP.

At the end of Questions—

Mr. E. SMITH: rose in his place, and asked leave to move the Adjournment of the House for the purpose of calling attention to a definite matter of urgent public importance, namely,
The visit of Herr Von Ribbentrop to London and Northern Ireland, and his association with Lord Londonderry and the Chief Air Marshal of the Royal Air Force.
I want to say a few words—

Mr. SPEAKER: The hon. Member wishes to move the Adjournment of the House upon a definite matter of urgent public importance, namely, the visit of Herr Von Ribbentrop to London and Northern Ireland, and his association with Lord Londonderry and the Chief Air Marshal of the Royal Air Force. Standing Order No. 8, under which the hon. Member moved his Motion, is the one under the conditions of which I have to give my consent. I do not think that this particular Motion fulfils any of the conditions of that Standing Order, and, therefore, I could not give him consent.

Mr. SMITH: With all due respect, may I offer a few remarks which may assist you in altering your Ruling? This country is now the greatest democratic country in the world—

Mr. SPEAKER: That would not alter the conditions under Standing Order No. 8.

Mr. SMITH: When I raised this matter earlier, hon. and right hon. Gentlemen on the other side laughed and ridiculed, but that is only history repeating itself.

Mr. HARDIE: I would like to ask the Prime Minister a question in relation to the business of the House.

Mr. SPEAKER: Sir Robert Gower.

Mr. A. BEVAN: On a point of Order. Is it not competent for any Member of the House to raise a question of the Business of the House after Questions.

Mr. SPEAKER: Yes, it is, by putting the point of Order before the Motion for the Adjournment was moved.

Mr. HARDIE: I was on my feet.

Mr. SPEAKER: So was I.

Mr. HARDIE: On a point of Order.

Mr. SPEAKER: There is no point of Order arising.

Mr. BEVAN: On a point of Order. It is, in my submission very desirable that the right of private Members, independently from Members of the Front Benches, to be able to raise matters of procedure, should be preserved. The hon. Member who was trying to ask such a question was ruled out of order. I submit to you that any Member of the House has a right, before you put the Motion for the Adjournment or for the suspension of the 11 o'clock Rule, to put questions arising out of the business of the House.

Mr. SPEAKER: The hon. Member did not raise the question until after the hon. Member for Stoke (Mr. E. Smith) raised the question of the Adjournment. Questions upon the business of the House come before that.

Mr. HARDIE: May I point out, with all due deference, that I was on my feet when you called upon my hon. Friend the Member for Stoke, before I got the attention of the House? I am not pressing the matter, but I feel that I have not had my opportunity. As I was on my feet, may I not claim the right to put a question to the Government with regard to business?

Mr. SPEAKER: It is too late.

Oral Answers to Questions — CONSOLIDATION BILLS.

Report from the Joint Committee, with Minutes of Evidence, in respect of the following Bills (pending in the Lords), namely,

Old Age Pensions Bill [Lords];

National Health Insurance Bill [Lords];

Widows', Orphans', and Old Age Contributory Pensions Bill [Lords].

Brought up, and read.

Report to lie upon the Table, and to be printed.

Oral Answers to Questions — PUBLIC SERVICES (CONTRIBU TIONS BY FRONTAGERS).

Leave given to the Select Committee appointed to join with a Committee of the Lords to report Minutes of Speeches delivered by Counsel.

Report from the Committee, with Minutes of Evidence and Minutes of Speeches delivered by Counsel, brought up, and read.

Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Amendments to—

South Staffordshire Water Bill [Lords], without Amendment.

Measurement of Gas,—That they have appointed a Committee consisting of Four Lords to join with a Committee of the Commons to consider whether it is expedient, and, if so, in what circumstances and subject to what conditions, to authorise the measurement of gas supplied by gas undertakers to consumers by means of meters so designed as to register in therms instead of in cubic feet, and request the Commons to appoint an equal number of their Members to be joined with the said Lords.

That they have resolved that leave be given to the Committee to hear parties interested by themselves, their Counsel, Dr Agents, so far as the Committee think fit.

Orders of the Day — FINANCE BILL.

Considered in Committee. [Progress, 16th June.]

[Captain BOURNE in the Chair.]

NEW CLAUSE.—(Import Duties Act, 1932, not to apply to foodstuffs.)

As from the first day of July, nineteen hundred and thirty-six, the provisions of the Import Duties Act, 1932, shall be deemed not to authorise the imposition of customs duties upon foodstuffs imported for human consumption, and the customs duties chargeable on such articles under that Act shall cease to be chargeable.—[Mr. A. V. Alexander.]

Brought up, and read the First time.

3.52 p.m.

Mr. A. V. ALEXANDER: I beg to move, "That the Clause be read a Second time."
I desire to direct the attention of the Committee to one or two outstanding facts which once more prompt the Opposition to put this Clause on the Paper. The first is that this question of the taxation of the food of the people is just one part of the extraordinary revolution in the imposition of taxation which has taken place under the National Government since the end of 1931. We have now embarked upon what I would describe as a rake's progress in finance, heavily increasing the amount of taxation to be raised each year, and not omitting, from the avenues from which the revenue is obtained, imposts upon the food of the poorest section of the people. I do not think it is generally recognised in the country to what extent the taxation of the food of the people has increased under the direction of the National Government. It is impossible, unfortunately, to get specific figures right up-to-date showing the actual division of the revenue received from food taxation as between that class of revenue which is usually described as revenue duties and the class of revenue which is raised under the Import Duties Act, 1932; but, taking the two together, it is clear that, including the Tea Duty, which has already been passed by the Committee, we are raising food taxation to-day between £35,000,000 and £36,000,000 a year, and that the actual increase in the amount of

food taxation since 1931 is, with the new Tea Duty, certainly not less than £20,000,000 per annum.
An extraordinary interest has been evinced during the last 12 months or so, not merely by those who claim to represent politically and industrially the working classes, but by those with a wider humanitarian point of view, including medical and other scientists, in the question of the lack of nutrition which is to be observed throughout the working classes of this country. Extraordinary figures have been given showing the number of people who cannot afford, out of their present remuneration, to spend more than a little over 4s. per week per head on food, and it seems to me to be almost an iniquity that at such a time, when the national income is so unjustly and unfairly divided, the new orientation of taxation should be in the direction of constantly increasing the imposts upon those very items of food which are essential to the maintenance of proper nutrition. I know that, when we raise this question of the new kind of taxation on food which has been imposed by two successive National Governments, the Government refer to the cost of living index figures, and to the fact that in their view the actual index level of those costs is not very much higher than the pre-war figure. On that question I should like to offer one or two specific observations.
In the first place, the Government have implicitly acknowledged by their recent decision, which I applaud, to appoint a committee to inquire anew into the basis of preparing and calculating the cost of living index figure, the fact that in the past many food items have been included which had no place in the inquiries of the economists and statisticians in preparing the cost of living index figure. Secondly, I would observe that in my judgment it has been quite fortuitous, and certainly no merit of the fiscal policy of the Government, that the actual level of food prices has remained no higher than it has in the last four or five years, for, owing to the world slump which continued from 1930 to the beginning of 1933, prices throughout the world have been abnormally low, and although I dare say some agricultural representatives would applaud the policy of the Government from the point of view that, at any rate in this country, that policy has arrested


to some extent the fall in the prices of agricultural products, nevertheless, bearing in mind the fact that, according to the Ministry of Labour Gazette, every year from 1931 to 1934 there were continuous and cumulative decreases in the weekly wages of large bodies of industrial workers, the policy of the Government did in fact prevent those who were subject to heavy wage decreases from having compensation in the other direction from the general fall in food prices throughout the world. To that extent, those who are in such need of food and nutrition values have been severely handicapped by the fiscal policy of the Government, and I would beg that that fact should be taken into account.
That is not the end of our case for the repeal of these duties. We have had Debate after Debate about the conditions of workers in the depressed and in the specially depressed areas which are now called Special Areas; we have some knowledge of the negotiations which have gone on within the last few years in regard to trade agreements; and there is undoubted evidence that the policy of Protection and of exclusion by quota, and especially by the imposition of tariffs, has had its repercussive effect on the trade, and especially the export trade, of such industries as the mining industry, with those very countries which in the past have had a reasonably free market in this country for their agricultural and primary food products. Generally speaking, an examination of the policy as a whole enables one to say with confidence, first, that it has proved to be unfair and unjust by entailing real hardships on working-class people throughout the country in regard to their standard of life; and, secondly, that it has not brought the beneficial effect which might have been expected on the general economy of the country in such matters, for example, as the balance of trade, since it has seriously interfered with the corresponding export trade from industrial and especially from mining areas.
In view of the fact that this question has been debated on previous occasions, and that some of my hon. Friends on this side of the Committee will also desire to press the rights of the consumers and the working classes to have at least the standard of life which will give them a minimum nutrition standard,

I do not propose to detain the Committee at any length. I would only add that we regard it as of fundamental importance to maintain the principle that as long at any rate as the present system, backed by the Government, operates, we must demand that whatever revenue requires to be raised for the general purposes of the nation, whether for defence or for any other class of national expenditure, that revenue should be collected by the imposition of taxation on the basis of the ability of the individual to pay, judging that ability by what the person has left with which to buy the bare necessities of life after he has paid taxation. We say, in regard to this policy of the Government and the imposition of food duties, that it cuts directly across that fundamental principle and is one which we must not only continually oppose in principle but continually seek to remove.

4.2 p.m.

Sir PATRICK HANNON: There are two questions I wish to put to the right hon. Member for Hillsborough (Mr. Alexander). He talked about the balance of trade. Is it not a fact that the balance of trade in 1931 was £1110,000,000 against this country, and that now, as a result of the policy of His Majesty's Government, the balance of trade is in our favour to the tune of £1,000,000 or £2,000,000? I do not know the precise figure, but at all events we have transformed a very serious adverse balance into a favourable balance. Does the right hon. Gentleman support his arguments by telling us that the policy of the Government has not been favourable to the maintenance of productive employment in this country1? Does he realise that that policy has been instrumental in putting back into productive work nearly 1,000,000 people, as against the position when the Labour Government went out of office? Surely that kind of argument is not fair to the Committee. The right hon. Gentleman asked us to support his Amendment without giving the Committee a fair statement of the immense economic advantages which have accrued from the policy of the Government.
The fiscal policy of the Government, the protection of the home markets for our own people, has been the greatest achievement of modern statesmanship in this country, and the right hon. Gentle-


man knows it. I say quite respectfully that his plea this afternoon is not quite honest. He ought at all events to admit that the policy of the Government has transformed the former hopeless and helpless outlook in the economic state of the country into a condition of prosperity, compared with the condition of any other country in the world. I am astonished that one who has taken a prominent part in the economic life of the country, among masses of people who by their own efforts are distributing mutual advantages amongst themselves through the great cooperative movement, should this afternoon have made an unwarranted attack against the work of the Government in the last five years. We are to-day the envy of the whole world for what has been done by the protective policy of the Government.

The DEPUTY-CHAIRMAN: I must remind the hon. Member that the new Clause is concerned only with foodstuffs.

Sir P. HANNON: Surely foodstuffs have been affected by our protective policy. The very fact that we have been able, by a protective policy, to raise the price level for the agricultural producers of the country, is of immense advantage to the economic progress of the country. No one knows that better than the right hon. Gentleman. I hope that we shall pursue still more the policy of protecting the primary producers of the country. The whole country to-day looks upon the future from a different angle, and has turned from the miserable and contracted and depressed situation in which we stood 4½ years ago.

4.5 p.m.

Mr. KINGSLEY GRIFFITH: The hon. Member for Moseley (Sir P. Hannon) endeavoured to make a point by quoting certain figures as to the balance of trade. It is really quite absurd to take a so-called adverse balance, selected at a moment which was admittedly a time of great crisis, and to seek to draw general deductions from that. As a matter of fact I have never understood the argument about balances of trade. Why a balance is called favourable when you are giving away more than you receive, I have never been able to understand for a minute. In any event we are not dealing here with the whole tariff problem; we are dealing with that particular part of it

which concerns the taxation of foodstuffs. Admittedly the Government's various methods of preventing foodstuffs coming in is an important part of their tariff policy. If anyone wants to see a reasonable discussion of the effects of that policy in general, and particularly the foodstuffs part of it, he can be recommended to read an article in this month's "Lloyds Bank Review" which states, in the opinion of the writer of that article at any rate, that the effect of these measures has been to clamp down firmly upon the depressed areas of the country the depression from which they were suffering. It is being done by the very measures which the Government have taken to restore domestic prosperity.
I would remind the Committee that when those measures were first introduced, when there first came about the idea of changing the whole fiscal policy of the country, a great many Members, some in very high places on the Government Front Bench, found it necessary to assure their constituencies that of course nothing would be done with regard to foodstuffs; that was out of the question. One wonders how this change has come about. Perhaps it is not difficult to see. I would myself admit that, once you have a system of the general kind, which I am not now at liberty to discuss, naturally there is a great clamour when any one particular industry finds itself left out, and no one will blame the agricultural interests for trying to get as good a place as possible in whatever fiscal system we have. But it seems to me that the motive which caused prominent Members of the Government to try to assure the country that if the worst came to the worst foodstuffs at any rate were safe—those reasons still remain, for the food of the people is of a different basis from anything else, and any Government which undertakes a policy which either makes the price of foodstuffs higher or which prevents the people from getting the advantage of such fall in price as would otherwise have come to them, is undertaking a very grave responsibility indeed.
One cannot help joining that up with the publication which all of us must have in mind, the report of Sir John Orr. When we have the evidence of such an unimpeachable authority that 50 per cent. of the population live below that line, in the matter of diet, which is regarded


as desirable for keeping people in health, and 20 per cent. even below the miserable standard which was put forward by the British Medical Association in 1933—when one has those facts before the nation, surely they alone are a sufficient justification for a new Clause like this. I do not wish to address the Committee at any length because I had come here unprepared to speak, and it was only the words of the hon. Member for Moseley that called me to my feet. But I am glad that the opportunity has been given to me, because I think that we who sit on these benches, reduced in numbers though we may be, would deserve to be reduced still further if we failed at every opportunity to utter our protest against the changes which have been made in the life of the people.

Sir P. HANNON: How does the hon. Member explain the fall in the index figure of the cost of living?

Mr. GRIFFITH: I am not concerned with the index figure, which includes a great many other elements besides the figures of diet. I prefer to base myself on an authoritative pronouncement which dealt specifically with diet and diet only, because that alone is relevant to the new Clause.

4.11 p.m.

Sir JOSEPH LAMB: Unlike the last speaker I am concerned with the index figure of the cost of living. I want to know why the right hon. Member who moved this new Clause is making an attack upon food only and not upon other commodities. The index figure for commodities as a whole is round about 40 above the figure for 1913, but the increase in the wholesale price of agricultural produce stands at only 22. So why attack that which is only 22 as against other commodities which are 40? Is it because the right hon. Member is in the distributive trade? I am speaking for those who are in the productive trade.

Mr. ALEXANDER: The new Clause was not drafted by me, but was drafted on behalf of the Opposition officially, and I was asked to move it. I have already stated that it is the policy of the Opposition to press for direct taxation for the raising of revenue, and we regard food as the worst possible type of commodity to be the subject of taxation.

Sir J. LAMB: Although the right hon. Gentleman may have moved the new Clause on behalf of someone else, he does not agree with it. [Ho/c. MEMBERS: "Nonsense !"] If that is not so, and the right hon. Member accepts responsibility for the new Clause, my question is still pertinent, why is the attack made collectively upon food and not upon other commodities? The right hon. Gentleman referred to the tremendous hardship on the working man. I agree, but to whom does he refer when he speaks of the working man? In agriculture there are more people employed than in any other industry. Although we hear so much about coal, and I am sorry that the industry is in such a condition, there are more engaged in agriculture than in the whole of coal and other mining industries and several other industries as well. These people are entitled to be considered as working people equally with the others. When hon. Members opposite attack food taxation they are attacking the standard of life of these people. Why does the right hon. Gentleman wish to exclude from the category of working men those who are employed in agriculture? For years the standard of life of those engaged in agriculture was lower than the standard of those engaged in any other industry, but during the whole of that time those who were in other industries were receiving benefits which agriculture was denied. Now agriculture is getting more of its rights in relation to other industries.
There is one other question: What is the difference between the cost of food consumed by the industrialist and the cost of food consumed by the agriculturist? I can see no difference at all. Consequently the agriculturist is affected just as much as others. To pay for that food he must have an adequate return, and that is all that he is asking for.

4.15 p.m.

Mr. EDE: I regret the absence of the right hon. Gentleman the Member for Epping (Mr. Churchill), because I well recall in the not very distant past the very eloquent speeches that he used to make, when he was in other company than the present, upon the iniquity of taxing the food of the people. I can only imagine that it is because he feels that some ghosts out of the misty past might arise and accuse him that he is not here


to repeat them. I could not help thinking that it would be a good thing if the hon. Member for Moseley (Sir P. Hannon) would repeat his speech in my constituency. He would have a most respectful hearing, but at the conclusion he would find his audience, no matter from what political party they were drawn, completely sceptical, because there are parts of the country which wish they might get back to 1931, and that great population along Tyneside is one of them. As a result of this policy of preventing imports, so far as you have succeeded in doing so, you have made overwhelmingly difficult the task of securing the export of the great commodities which are produced in those areas and, therefore, I see the very closest connection between the troubles of the export trade and the import trade of the country.
I join issue at once with the hon. Member for Stone (Sir J. Lamb) with regard to his story about the connection between the prosperity of the worker in agriculture and the system of Protection. The worst period the agricultural labourers ever had, as we were reminded in connection with the centenary of the transportation of the Dorsetshire labourers, was when the protective system was highest. There never has been and, as far as I can see, there never will be any connection, while agriculture remains under a capitalist system, between the prosperity of one section of the agricultural community and the wages paid to the agricultural labourer. I do not imagine that they would even now get the wages they do, when they are lucky, but for the fact that there is a law assuring them of their wages, and the prosecutions that take place from time to time show that they are not paid as an act of grace or as some thank-offering because the country has adopted a protective system, but because they have been the subject of the usual negotiations between employer and employed, backed up in this, case by the authority of the State. In my constituency, which includes the greatest coal exporting dock in the world, there is no doubt as to the connection between this policy of import duties and the continued and growing distress that confronts us.

The DEPUTY-CHAIRMAN: We are limited to import duties on foodstuffs.

We cannot go into the whole question of Protection.

Mr. EDE: I was going to say that we are one of the great importing ports for agricultural produce from the countries on the other side of the North Sea, and it does not need Parliamentary candidates and Members of Parliament to point the moral of the way in which imports and exports pay for one another. If these people did not say it, the stones of the streets would cry out and the vacant berths at the docks would proclaim the true economic doctrine that used to be held. I regret very much that, owing to the way the matter was introduced, it is only on an occasion like this that we can raise anything approaching the general issue. We were asked to reduce the duty on dead turkeys by 2d. a pound just before Christmas, and I appealed to the Financial Secretary to give me an assurance that that would mean that we should be able to get cheaper turkeys, but nothing of the sort. He absolutely declined to give any pledge in the matter. The effect of these duties is that from time to time certain articles of diet have disappeared from the tables of the working class altogether.

Sir J. LAMB: Turkeys never came on the agricultural labourer's table.

Mr. EDE: It is not quite the article that the hon. Member had in mind but, if he has not got it as the result of these import duties, where does the connection between the import duties and his standard of prosperity come in?

Sir J. LAMB: The hon. Member referred to turkeys.

Mr. EDE: I certainly referred to a tax upon turkeys, and I do not imagine that there were many industrial workers' tables that had turkey on them last year. I do not imagine that many of those engaged in raising turkeys in Norfolk and elsewhere found any on their Christmas dinner tables. I see no reason for imagining that, if you continue import duties, it will lead to raising the standard of living any more than it has in the past. From time to time one asks why there is no bacon for breakfast, and one is told that suddenly and unaccountably the price has gone up, so that within the allowance that is handed over to the person who has to deal with the weekly


budget bacon cannot be produced. I have heard questions in the House on that sort of subject. In this way we are using the fiscal system, it may be to confer benefits on certain people, but to lower the standard of life and the variety of the articles that can be placed on the breakfast tables of the industrial workers, and the agricultural labourers' tables, too, because I do not imagine that much English bacon at any time gets on to their tables. They are as dependent as the rest of us on Danish bacon for their taste of pig flesh. I hope i t will not be very long before this policy will be recognised for the failure that it is and these duties will be withdrawn. The President of the Board of Trade said everyone wants freer trade, and there is no country in the world that has the courage to stand up for it. I hope that this country will very soon revert to the fiscal policy which secured its prosperity and made it, as the hon. Member for Moseley said, the envy of the world, instead of having districts like Tyneside and South Wales where each year brings increasing depression instead of a return to prosperity.

4.25 p.m.

Mr. ANNESLEY SOMERVILLE: The Opposition is making a brave show, but the facts are against them. The price of Danish bacon now is less than when the last Labour Government was in office and the wages of agricultural labourers are considerably higher. One objects to the term "working men" being applied only to workers in the factories and in the gowns. There are working men in the countryside as well and, if we look upon the general effect of the present fiscal policy of the Government, it has resulted in a general rise in wages.

The DEPUTY-CHAIRMAN: I have frequently had to point out that the Debate is limited to foodstuffs.

Mr. SOMERVILLE: Hon. Members opposite continually try to prove that the present fiscal policy is resulting in dearer food, and that is not true. The standard of life is higher than it has ever been and there are more people in employment than there have ever been, and that is the direct effect of the present fiscal policy, in particular the policy in regard to food, and I hope that it will be persisted in and that this Clause will not be accepted.

4.27 p.m.

Mr. HOLDSWORTH: I should like to take up the hon. Member's statement on the question of food prices. I do not know whether he inquires of his wife as to prices, but it is always an interesting subject to me. In the last Parliament I took some interest in the matter of agricultural marketing, and, in particular, of prices. When we started on this food policy the wholesale price of bacon was approximately between 54s. and 56s. per cwt. According to the "Economist" a fortnight ago, that price had risen to from 94s. to 96s. I am taking no oath as to a shilling one way or another, and am speaking without a brief. I believe that butter within the last 12 months has risen 3d. or 4d. per lb. The hon. Member for Stone (Sir J. Lamb) asks, "Why single out foodstuffs?" I was rather surprised at the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) getting up in a somewhat apologetic manner and saying, "I am not sponsoring this. It is my party and I am doing it out of a sense of duty." I would single out foodstuffs, because the greater proportion of the expenditure in a working-class household is on food or on rent.

Sir J. LAMB: I thank the hon. Member for telling me that, because I now know where he stands. A great proportion of the production of the agricultural labourer is food.

Mr. HOLDSWORTH: The vital thing in a working-class household is, What does the woman do? She pays the rent, she pays 1s. for insurance, she may be contributing to a clothing club in order to clothe her family and she says, "How much have I left to buy food?" What she can buy is dictated by the amount of money that she has left. It is not a question of what the family needs. If bacon is 6d. a lb. and she has 1s., she gets 2 lbs. If it is 1s., she is limited to 1 lb. I do not mind what the right hon. Gentleman the Member for Hillsborough says is his reason for moving this.

Mr. ALEXANDER: The hon. Member really must not deliberately misrepresent me. It is most unfair. The hon. Member opposite suggested that I might have moved it because I am interested in the distributive trade. I got up to repudiate that and said that it was an official Opposition Amendment. The hon. Member


has no reason to suggest that I apologised.

Mr. HOLDSWORTH: I have certainly not deliberately misrepresented the right hon. Gentleman, for that is the last thing I would think of doing. If he thinks that I have misrepresented him, I will withdraw every word I have said. I want absolutely to affirm that I make no apology for singling out foodstuffs. Ever since I came into this House I have voted against every duty upon foodstuffs, and against every quota, and I shall continue to do so. In the early days of my own experience I knew what it was to go into these markets, and buy, with the money I had, limited quantities. There can be no justification, after all the evidence which has been given during the past 12 months with regard to the provision of proper and nourishing foods for the people, and the scarcity of those foods, for this policy. I go further. What advantage have agriculturists gained? There have been fewer people employed in agriculture since this policy was adopted than was the case before. The hon. Member said that that is because the policy has not been fully operative. What does he mean by that? Does he mean that they have not sufficient quotas, taxes, or one thing or another? He says, "Give us more; make things dearer." The quantities of food consumed will not be affected either by Government policy or by the suggestions of the hon. Gentleman, but by the consumer and his ability to pay for it. That is the only thing that can decide this particular matter.

Sir J. LAMB: Does the hon. Member take into consideration at all the cost of production? He says that price is the only thing which rules the position. If an article is sold below the cost of production, is he entitled to demand it for himself or for anybody else?

Mr. HOLDSWORTH: No.

Sir J. LAMB: That is the only point which I have at issue with the hon. Member.

Mr. HOLDSWORTH: I am coming to that particular point. The agriculturist to-day, with all the tariffs and quotas, has not got a fair reward. It is not a question of tariff or duty, but of the distribution of the product which is

largely at fault. For instance, does the hon. Member think that under the wonderful milk scheme the farmer is getting a proper return for his labour? Who gets the difference between the price which the farmer receives for his product and the distributors' price, which the consumer has to pay? That is where there is something wrong in this country. I went to Denmark and spent three weeks in going round their department of agriculture and their farms, etc., and I saw what was done by voluntary amalgamation and scientific voluntary distribution. I suggest to the hon. Member for Stone that, in spite of the policy of the Government, the farmer does not get, in many cases, an adequate return; nor does the farm labourer get an adequate wage. Index figures are sheer nonsense. All sorts of figures are taken into consideration relating to food which the ordinary worker does not have on his table week by week. Meat, butter, flour, sugar, tea, are the things which affect the family budget of the ordinary worker. It is not whether tinned pears have gone up, or something like that. The answer to the question of the hon. Member for Stone, "Why single out foodstuffs" is that the worker can say, "I will not have another suit." He can say, "I will do without it," but if he is to exist at all he must eat.

Sir J. LAMB: Who is the "worker"? Is he the agricultural labourer or not?

Mr. HOLDSWORTH: I think that such a definition can be given to him, and I cannot see the point of the hon. Member's interruption. If the price of foodstuffs goes up, it naturally affects the agricultural labourer. You have not made him better off.

Sir J. LAMB: If foodstuffs go down in price and are sold at less than the cost of production, does that affect the agricultural labourer or not?

Mr. HOLDSWORTH: Exactly, but my point is that you are not getting a proper demand for your goods when you are placing them outside the ability of the ordinary people to purchase them. The agriculturist and the agricultural labourer are absolutely dependent upon the consumer of the produce of agriculture. If you make the industrial


workers prosperous, then the agricultural areas will reap their reward. I do not want to cause any division between the agricultural labourer and the industrial worker. They should both be looked after. But it is hardly correct to say that the agricultural labourer is in the same position with regard to the question of food as the industrial worker. There are tremendous facilities —and no one knows it better than the lion. Member for Stone—available to the agricultural labourer. He can produce a good deal of his own food. Undoubtedly the price of certain foodstuffs has increased.
One can say what he likes about the index figures. I do not accept them. You have not made agriculture prosperous, and we have to make up our mind in this country what sort of balance we are to have between agriculture and industry. With regard to the policy in relation to food in this country, we have two Departments. We have the Minister of Agriculture working in one particular way, and the President of the Board of Trade working in another particular way. What do we see happening in this House day after day? Questions are asked about trade agreements, and, one after another, agriculturists get up and say, "Stop this coming in"; and, "Will the right hon. Gentleman bear this in mind?" We in the industrial areas ask, "Will he bear us in mind" If we do not take in foodstuffs, how are we to export the products of the industrial areas? The right hon. Gentleman the Member for Hillsborough (Mr. Alexander) has never moved a better Clause, and it will give me the greatest possible pleasure to support it in the Division Lobby.

4.38 p. m.

Sir WALTER SMILES: The reason that these duties are being imposed is that they are for the general good of the country, and I support them because I believe that they are for the general good of the whole country. In striking a balance between agriculturists and the people in the towns, one should ask whether the additional million people who are now employed, compared with the number employed when this Government came into power, would like to be thrown out of work again and go back to the condition in which they were in

1931, or whether they prefer to have the work and the wages so as to be able to buy food? The hon. Gentleman the Member for South Shields (Mr. Ede) spoke of the "stones in the streets," and about the absence of Danish goods from this country. What about the thousands of acres of wheat now being cultivated which were almost jungle land before this Government came into power? Has not that done some good for somebody? The hon. Gentleman also spoke of our exports. I would point out that now we stand first in the world in the matter of exports, and at the time this Government came into power we were only third. How are we to expect our people to work in the cotton looms of Lancashire or anywhere else if we do not have trade agreements with other countries? Should it not be possible for the President of the Board of Trade to make fair agreements and obtain fair treatment for our exports elsewhere? We have to think of the Argentine and of Australia, which gave us preferences the other day. It is for that reason that I support these duties, believing that they are for the good of the whole country.

4.40 p.m.

Mr. RILEY: I support the Clause moved by my right hon. Friend the Member for Hillsborough (Mr. Alexander), and will confine my remarks entirely to the question of the merits of the Import Duties on foodstuffs. The hon. Gentleman the Member for Blackburn (Sir W. Smiles), in advocating the retention of these duties on the ground that they have contributed to our increasing prosperity and trade, overlooked the fact that we went off the Gold Standard in 1931, and that, in addition, in the last few years there has been an enormously increased expenditure of national money upon armaments. Those two factors have done a great deal more to bring about such revival of trade as has taken place than the mere imposition, in the interests of the people concerned, of heavy duties on foodstuffs. The hon. Gentleman the Member for Windsor (Mr. A. Somerville) seemed to argue that the imposition of the duties on foodstuffs had not resulted in any increase of price to the consumer in this country. That was an extraordinary argument. We have the facts that at least £20,000,000 more in the way of duties is being charged upon the import


of foodstuffs which has to be paid, of course, by the people of this country. [HON. MEMBERS: "No!"] Hon. Gentlemen opposite cannot put up the argument to-day that the cost is borne by the exporters in foreign countries.

Mr. A. SOMERVILLE.: A large amount of foodstuffs is sent to this country under cost of production, and it clearly pays the exporters of that food to pay the duty, and, at the same time, make a profit in this country.

Mr. RILEY: As the Board of Trade publish the facts from time to time, we know that the price of these foodstuffs, the price of bacon for instance, has increased very considerably since the duties were imposed. I do not intend to argue the question as to who pays the increased price. The point I wish to put to the Chancellor of the Exchequer is that the retention of these duties, which admittedly add to the cost of living of a very large number of working-class people in this country, is the pursuance of a policy which really does not reflect credit upon any party in this House. The imposition of duties upon common articles of food of everyday use such as were enumerated by the hon. Gentleman the Member for South Bradford (Mr. Holdsworth)—meat, sugar, butter, potatoes and vegetables—is a policy which I cannot characterise by any other word than despicable. It is a policy of deliberately lowering the standard of living of great masses of our people. It is not difficult to visualise, and it cannot be disputed, that we have to-day many hundreds of thousands of people, widows and old age pensioners, living on a weekly pension of 10s., and unemployed families who have to seek either unemployment benefit or public assistance. Since these duties were imposed there can be no question about it that they are paying more out of their diminished scales of weekly incomes than they did before, and I suggest to the Chancellor of the Exchequer that that is not a policy of which anybody should be proud.
The retention of these duties is contrary to every accepted principle for the raising of public taxation. There is a principle to which every party subscribes, more or less, that you are not entitled to tax people who are not in a position to pay

the tax without impinging upon a decent physical standard of living. That is the principle which underlies the Income Tax. If it is sound to tax by putting a duty upon food which people must have, if it is justifiable to tax people whose incomes are not sufficient to get an adequate daily supply of foodstuff, why not apply the same principle and put Income Tax upon every person who receives wages? We do not do that, because it is recognised that the State ought not to call upon people to pay taxation who have not a certain minimum assured standard of living. The policy of retaining duties upon foodstuffs, which means hardship on people who are at the bottom of the social scale, is a policy which is despicable and of which any party ought to be ashamed. This country is rich enough to derive its taxation from sources other than those which inflict hardship upon great masses of people.
It may be argued that the Government have to follow this policy in order to assist agriculture, and so on. I say frankly that if it is considered necessary to give direct subsidies from the State to various sections of agriculture I would rather do it as we did in the case of the Wheat Subsidy, and give it direct rather than punish the people who have to live on an inadequate weekly or daily income. I appeal to the Chancellor of the Exchequer to be big enough to take away these indefensible duties, which are pinching the people in their daily living. I am old enough to remember that almost 50 years ago there was a great political party which stood for a free breakfast table—no taxes on food of any kind. I am reminded that there are some descendants of that party who are Members of the present Government, although they have a new kind of name. I am glad that the hon. Member for South Bradford (Mr. Holdsworth) still holds by that policy of a free breakfast table, and as a Member of the Labour party I reassert belief in that doctrine. I would ask the Chancellor of the Exchequer to wipe away the stain of a policy which retains these duties on foodstuffs.

4.50 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): Perhaps it will be for the convenience of the Committee if I intervene now. The new Clause is somewhat narrower in its scope


than some of the speeches on the question of tariffs and food taxes generally which have been delivered. The right hon. Member for Hillsborough (Mr. Alexander), in introducing the Clause, referred to the fact that there has been a revolution in the taxation system of this country. There has been a change, but it was not a change that happened accidentally. It was a deliberate change inspired by policy and a change which, without transgressing the Rules of Order, I may claim has abundantly proved its wisdom and its success. The right hon. Gentleman made a general statement as to the increases in the taxation of food, but he failed to mention, and no hon. Member who has supported the proposed new Clause has mentioned, that agricultural production at home has shown a very substantial increase. Surely what affects the cost of living and the availability of food for the people of this country is the total amount of food that can be purchased at a cheap price, and no judicial weighing up of the situation can be achieved without taking into consideration both sides of the account, namely, the policy which the right hon. Gentleman denounced, along with the undoubted expansion in the production of food within our own island.
The hon. Member for Stone (Sir J. Lamb) dealt with the cost-of-living figures. I shall deal with them a little later in detail. In the meantime, I would make one or two suggestions arising out of the course of the Debate. The hon. Member for South Bradford (Mr. Holdsworth), whose speech had a refreshing air of antiquity about it, urged, in support of his argument, that food prices had gone up as a result of taxes on eggs, bacon and butter. He was proud to claim that he had voted against every duty on food since he had been a Member of this House. I wonder whether he voted against a duty on bacon.

Mr. HOLDSWORTH: I am quite aware that there is no duty on bacon. What I said was in answer to something that had been stated by the hon. Member for Stone (Sir J. Lamb).

Mr. MORRISON: It is a little surprising that in discussing this question, hon. Members in support of their assertion that these taxes have created a rise in the cost of food, should instance bacon. Bacon happens to be a duty-free article.

We are discussing a proposed new Clause. If the new Clause were inserted as the right hon. Member for Hillsborough desires it to be, it would make no alteration to the position as regards bacon. Therefore, I fail to see the relevance of any discussion founded on the price of bacon in regard to this particular Clause. The second example that was given by the hon. Member for South Bradford was butter. The proposed new Clause concerns duties that are imposed under the Import Duties Act. There is no such duty upon butter. The only duty that falls upon butter is that under the Ottawa Agreement. Again, if this proposed new Clause were passed it would alter the position in regard to butter not one jot.
What is the position as regards butter? The hon. Member ventilated the old doctrine which has been preached in this country for so many years. Let me remind him that the price of butter today is cheaper than it was before the War, when a Liberal Government was in power and when the full, unadulterated milk of Free Trade was supposed to be the policy of this country. You can buy butter and cheese cheaper to-day than under the Liberal Government that existed before the War. The point is that the price to-day is less than it was before the War, when we had Free Trade. Surely, it is putting a little strain on the Committee for the hon. Member to build up a great denunciation of the Government's policy upon two articles, one of which is duty-free and the other of which is not affected by the Clause and is actually cheaper to-day than it was when the Liberal Government was in power.
The hon. Member for South Bradford was frank and candid with the Committee in the last statement he made, referring to the cost-of-living figures. He said that he did not care for figures. It is quite obvious that the hon. Member was putting forward a point of view not based upon facts hut upon theory.

Mr. HOLDSWORTH: The point that I was making was that there are so many things calculated in formulating that index figure that it is not a true reflection of what the workman consumes in a week. Surely, that fact is proved by the appointment of a committee to inquire whether or not the index figure is correct. I do not accept the figure.

Mr. MORRISON: The hon. Member's intervention does not dispose of the facts as to the price of butter and cheese.

Mr. HOLDSWORTH: I will answer that point if the hon. Member wishes. The hon. Member for Windsor (Mr. A. Somerville) said that prices had not increased. The Debate had developed along the lines of foodstuffs generally. In response to what Mr. Speaker said at the beginning of this Parliament, I was trying to answer a point put from the other side. I know that, to be technically correct, we were out of order in discussing that.

Mr. MORRISON: The hon. Member has given an explanation of how he came to base an attack on the Government upon something that was quite irrelevant. The proposed new Clause applies wholly to duties which are levied as a result of the Import Duties Act. Therefore, the Committee ought to be in possession of the facts as to the exact extent of those duties. The articles affected are cereal products, poultry, eggs not in shell, that is, eggs that come in in liquid form, most vegetables and certain fruits. Those are the articles which would be free from taxation if the new Clause were carried. There is one difficulty about this matter. We talk about foodstuffs, as the Clause does, "imported for human consumption." The fact is that a great many articles which are imported for the purpose of industry can be used as food. That is to say, there are many articles which come in which can be used for food and also used for industry. If we were to apply this Clause as the right hon. Member for Hillsborough has put it on the Order Paper it would involve a very difficult problem of Customs control. It would mean that where you got a certain article of that character which could be used for other purposes you would have to follow the article to its destination before you could be sure whether it was an article for human consumption or was intended for some other purpose. That is a familiar objection to many forms of proposed Customs duties and it is one which is very powerful in the present case.

Mr. ALEXANDER: Surely the remedy is to abolish them all. If the Government will first accept the new Clause we shall be willing to ask them to accept further Amendments to abolish the whole.

Mr. MORRISON: We have to deal with the Clause as it appears on the Order Paper, and it is well that the Committee should know what it really means. At the present time, so far as regards a plentiful supply of cheap food, this country is in a better position than any other country in the world. Various references have been made to the cost-of-living figures, and although I am aware that no one can say that they are necessarily correct they are, I think, reliable. The cost of living as a whole shows a rise of 44 per cent. over 1914, but the rise in the cost of foodstuffs is only 26 per cent.

Mr. ALEXANDER: That is a rise of 11 per cent. since 1933?

Mr. MORRISON: I am taking the last figures, and I propose to examine the principal items which have caused the rise in the cost of living. None of the articles which contribute to this rise would be affected by the new Clause. The principal article showing a great rise is potatoes, and the curious fact is that the duty on potatoes was removed on the recommendation of the Import Duties Advisory Committee in March. Potatoes are now free.

Mr. HOLDSWORTH: Surely the Financial Secretary will not suggest that this will not make any difference? Is it not the fact that the duty on potatoes, coupled with the policy of the Government of restricting the acreage of production, has caused the increase in the price of potatoes?

Mr. MORRISON: It has had nothing to do with it. I am going to put the whole facts of the ease before the Committee so that hon. Members might get a true view of the position. The price of foodstuffs is not affected by duties but by production; on the amount available at home and abroad. If you get a bad crop not only here but on the continent and there is a world shortage in any of these articles, that is what affects the price, not a duty. Hon. Members who say that it is the Government's policy which has raised the price of foodstuffs, and of course evoke a ready response from some people, should take into consideration the far more important operations of nature, physical changes, bad crops, which really affect price more than anything else. The amount of imported


potatoes even in normal years without any question of a duty or any restriction is only 4 per cent, of the total consumption. The home market on an average supplies 96 per cent. of the total amount of potatoes consumed, and it is idle to suggest that the rise in the price of potatoes is due to the policy of the Government when 96 per cent. are home-produced and only 4 per cent. imported.

Mr. ALEXANDER: If that is the real position what was the object in taking off the £1 per ton duty? I speak as a member of the Consultative Committee advising the Government on potato imports. It was obvious that as there was a shortage of crop, which I admit is a powerful argument, it was becoming impossible to check the increase in price because we could not get what crops were available on the Continent so long as the £1 per ton duty remained on, and, therefore, the Government removed the duty temporarily in order to arrest the rise in price. That is our whole case.

Mr. MORRISON: The right hon. Member's facts are the same as mine, but the reason why the Government accepted the recommendation of the Advisory Committee to remove for a time the duty on potatoes was because there was a shortage in this country and it was desirable to admit more for a short period. I hope the Committee will resist the new Clause. If it was accepted we should be faced with a very anomalous position. The duties under the Ottawa Agreements would remain in force, and it would be necessary, in order to keep faith with the Dominions, to retain the Import Duties Act duties on foodstuffs so far as the Ottawa Agreements are concerned. That would be a selection of products; and an anomaly. But there would be a far greater anomaly than that. To accept the new Clause would be to make a most invidious distinction against the industry of agriculture. There is no reason at all, if our industries have benefited, as they have, by the fiscal policy of the Government, why the great industry of agriculture should be deprived of the benefits of the fiscal system. There is no more deserving class of workmen than the agricultural labourers. When they are dealing with the miners, a most deserving body of workmen who have had a very hard and difficult time, hon. Members opposite suggest that it is

wrong that coal should be sold at a price which they allege denies the provision of proper wages for the miners. I ask them to extend the same consideration to those engaged in the agricultural industry. Why should the products of their toil be unprotected in the markets of this country?

Mr. MacLAREN: The Financial Secretary was on the interesting point as to the products which have contributed to the increase in the cost of living. Can he give us in more detail the various articles which have contributed to the rise in the cost of living?

Mr. MORRISON: I can give this comparison between the prices on the 1st May, 1935, and 1st May, 1936. The total rise in the cost of living was from 139 to 144; that is compared with 1914. The right hon. Member for Hillsborough (Mr. Alexander) has said with great truth that there are seasonal causes which may affect the index figure by two or three points in one month. That, however, is the total difference between 1st May, 1935, and 1st May, 1936; a very small difference, and it shows a remarkable steadiness in the cost of living. The increase in the cost of food was from 118 to 125; in frozen mutton from 140 to 141—a very small increase of id. per lb.—bacon 120 to 124—and bacon is not subject to a duty—fish 199 to 207. The position with regard to fish is that there is a 10 per cent. tariff on foreign caught fish, but this foreign caught fish is only a very trivial proportion of the total supplies of this country. Flour rose from 117 to 125, bread from 132 to 142—equal to a id. per 4 lb. loaf—butter (fresh) 91 to 98, and salt 80 to 88, cheese 94 to 99, margarine 74 to 83, and potatoes 113 to 165. That is a large increase, and I have already explained that it cannot be attributed to any duty. Tea rose from 128 to 131, sugar from 111 to 112, and milk 171 to 173. The Committee, I am sure, will marvel at the remarkable steadiness with which we are able to supply cheap and plentiful food to the people of this country.

5.14 p.m.

Mr. BANFIELD: Has the Financial Secretary really thought out this matter when he says that there is a cheap and plentiful supply of food for the people of this country? He seems to consider that a 26 per cent. advance is a more or less trivial matter.

Mr. MORRISON: That is over the figure for 1914.

Mr. BANFIELD: There are millions of people in this country who get considerably less than £2 per week. The agricultural labourer, who is supposed to be benefiting from this prosperity in agriculture, has the utmost difficulty in getting 30s. a week established as a minimum wage. In industrial centres—in constituencies such as mine—38s. 6d. a week is a recognised wage for an adult worker. I would point out to the hon. and learned Gentleman that a 26 per cent. increase in the cost of food means a great deal to these people.

Mr. MORRISON: The 26 per cent. increase, of course, has taken place since 1914. I would point out to the hon. Member that agricultural wages have increased by nearly 100 per cent. since that time. In my own district they were 15s. a week in 1914 and they are 30s. a week now.

Sir I. LAMB: At the present time there is no case where the minimum wage is less than 32s. a week, with extras ranging from 5s. to 10s.

The CHAIRMAN (Sir Dennis Herbert): Hon. Members in all parts of the Committee must avoid drifting away from the proposed Clause which is under discussion.

Mr. BANFIELD: What I was trying to point out was that it would be wrong to make any attempt to set those engaged in agriculture against those engaged in industrial pursuits. This proposed new Clause attempts to do something to secure cheap food during a period when wages are remarkably low. I was struck by the hon. and learned Gentleman's statement that there has been a change of policy which has been marked by success. We have no guarantee whatever that the small number of articles which the hon. and learned Gentleman enumerated will remain as at present, and he must be aware of the possibility of many more articles of food being brought under the provisions of the Import Duties Act, 1932. If this proposed new Clause were carried, we should at any rate be free from that possibility and we should know that other articles could not be taxed as a result of the Import Duties Act, 1932.
The question of food is a fundamental one and it affects every home in the land. It is no use the hon. and learned Gentleman arguing that this proposed new Clause is unnecessary. We have to remember that to all people food is the most fundamental thing. This Clause is drafted for the purpose of preserving as far as possible a cheap food supply. If we are to have something which will make food dearer, I want the hon. and learned Gentleman to bear in mind that that can be successful only if there is an increase in purchasing power to compensate for the higher prices; otherwise very grave injustice will be done to the vast majority of our people. It is not sufficient for hon. Members to argue that this policy has brought success. It may have been a success in the case of a few people, but if it brings no prosperity where it is wanted most, that is to say, in the homes of the wage earners, whether they be agricultural or industrial workers, that policy must in the main fail. I look upon this proposed new Clause as being something in the nature of a safeguard. We are not satisfied that any of our people can hear higher food prices in present conditions, and it is because we want to safeguard them as far as we possibly can that we are supporting this new Clause.

Notice taken, that 40 Members were not present; Committee counted, and 40 Members being present—

5.21 p.m.

Mr. DINGLE FOOT: I would like to refer to the remarkable series of arguments used by the hon. and learned Gentleman the Financial Secretary to the Treasury. He gave the Committee to understand that if there has been any rise in the prices of foodstuffs during recent months, it was due to drought, floods or some other calamity or upheaval. I do not believe it is possible to defend this policy by pleading an act of God on every occasion. I could not see the relevance of the argument used by the hon. and learned Gentleman when he gave the Committee the index figures of foodstuffs for the year 1935 compared with 1936. There has been no change of fiscal policy from 1935 to 1936, and therefore it seems to me that the figures which he gave at considerable length have absolutely no relevance to the Clause now under discussion. The hon. and learned


Gentleman dealt with the question of butter, for instance, and the principal argument he used was that the price of butter is lower now than it was before the War when, as he reminded the Committee, a Liberal Government was in office.
Has it never occurred to him that there may be alterations in world prices and that consequently the price of butter or of any other commodity may vary, apart from any duties which are imposed? The test is simply this: there is a series of duties upon food, with some of which we are dealing in this proposed new Clause; if this new Clause were carried and those duties were swept away to-morrow, would there not be an immediate fall in the prices of those foodstuffs to the consumer? The hon. and learned Gentleman does not answer, but I remember this question being put in the last Parliament. It was put by Sir Herbert Samuel to the right hon. Gentleman the Chancellor of the Exchequer, and the Chancellor tried to evade it by saying that he thought there would be a rise in the price of foodstuffs in the long run. Even he, the chief protagonist of this policy, was not prepared to answer with regard to the immediate effects of removing these duties.
The hon. and learned Gentleman rather fenced round the question of the duty on potatoes. He said that duty had been removed in order that larger supplies should come into the country and later on he gave the figures for potatoes,

showing that there has been an increase in the price. Does he really say that if that duty had been maintained, the increase in price would not have been even steeper? He knows that would have been the case and that the only reason for removing the duty was that the Government and everybody else knew perfectly well they could not separate the question of the duty from that of the price to the consumer. Finally, the hon. and learned Gentleman raised a technical difficulty when he said that there are some articles which are used for food and also for some other purposes, and that consequently there might be some difficulties at the Customs houses in distinguishing what is meant for human consumption and what is being brought in for some other reason. We have often had that distinction drawn. As the hon. and learned Gentleman remarked, this is a very ancient controversy, and the distinction has frequently been drawn by the hon. and learned Gentleman's own party between taxes on food and taxes on other commodities. I am sure that that difficulty, if it be a difficulty, must have been in the mind of the present Prime Minister when he was opening his election campaign in 1929 and said:
The Unionist party is pledged and will continue to be pledged not to impose taxes upon food.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 123; Noes, 194.

Division No. 241.]
AYES.
[5.28 p.m.


Acland, Rt. Hon. Sir F. Dyke
Dalton, H.
Henderson, J. (Ardwick)


Adams, D. (Consett)
Davies, D. L. (Pontypridd)
Henderson, T. (Tradeston)


Adams, D. M. (Poplar, S.)
Davles, S. O. (Merthyr)
Hills, A. (Pontefract)


Adamson, W. M.
Day, H.
Holdsworth, H.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Dobbie, W.
Holland, A.


Anderson, F. (Whitehaven)
Ede, J. C.
Jagger, J.


Attlee, Rt. Hon. C. R.
Edwards, Sir C. (Bedwellty)
Jenkins, A. (Pontypool)


Banfield, J. W.
Evans, D. O. (Cardigan)
Jenkins, Sir W. (Neath)


Barnes, A. J.
Evans, E. (Univ. of Wales)
Johnston, Rt. Hon. T.


Barr J.
Foot, D. M.
Jones, A. C. (Shipley)


Batey, J.
Frankel, D.
Jones, H. Haydn (Merloneth)


Benson, G.
Gallacher, W.
Kelly, W. T.


Bernays, R. H.
Gardner, B. W.
Kennedy, Rt. Hon. T.


Bevan, A.
George, Major G. Lloyd (Pembroke]
Kirkwood, D.


Broad, F. A.
George, Megan Lloyd (Anglesey)
Lathan, G.


Bromfield, W.
Gibbins, J.
Lawson, J. J.


Brooke, W.
Graham, D. M. (Hamliton)
Leach, W.


Brown, Rt. Hon. J. (S. Ayrshire)
Greenwood, Rt. Hon. A.
Lee, F.


Burke, W. A.
Grenfell, D. R.
Leonard, W.


Cape, T.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Leslie, J. R.


Casselis, T.
Griffiths, G. A. (Hemsworth)
Logan, D. G.


Chater, D.
Groves, T. E.
Lunn, W.


Cocks, F. S.
Hall, G. H. (Aberdare)
Macdonald, G. (Ince)


Compton, J.
Hall, J. H. (Whitechapel)
McEntee, V. La T.


Cove, W. G
Hardie, G. D.
McGhae, H. G.


Daggar, G.
Harris, Sir P. A,
MacLaren, A.




Maclean, N.
Potts, J.
Strauss, G. R. (Lambeth, N.)


MacMilfan, M. (Western Isles)
Price, M. P.
Taylor, R. J. (Morpeth)


MacNeill, Weir, L.
Pritt, D. N.
Thurtle, E.


Markiew, E.
Richards, R. (Wrexham)
Tinker, J. J.


Mathers, G.
Riley, B.
Viant, S. P.


Maxton, J.
Ritson, J.
Watkins, F. C.


Messer, F.
Roberts, Rt. Hon. F. O. (W. Brom.)
Watson, W. McL.


Montague, F,
Robinson, W. A. (St. Helens)
Westwood, J.


Morrison, Rt. Hon. H. (Ha'kn'y, S.)
Salter, Dr. A.
White, H. Graham


Muff, G.
Sexton, T. M.
Wilkinson, Ellen


Naylor, T. E.
Short, A.
Williams, E. J. (Ogmore)


Owen, Major G.
Silkin, L.
Williams, T. (Don Valley)


Paling, W.
Smith, Ben (Rotherhithe)
Young, Sir R. (Newton)


Parker, J.
Smith, E. (Stoke)



Parkinson, J. A.
Smith, T. (Normanton)
TELLERS FOR THE AYES —


Pethick-Lawrence, F. W.
Stewart, W. J. (H'ght'n-le-Sp'ng)
Mr. Whiteley and Mr. Charleton




NOES.


Agnew, Lieut.-Comdr. P. G.
Emrys-Evans, P. V.
Morrison, W. S. (Clrencester)


Albery, I. J.
Ersklne Hill, A. G.
Munro, p.


Anstruther-Gray, W. J.
Everard, W. L.
Neven-Spence, Maj. B. H. H.


Astor, Hon. W. W. (Fulham, E.)
Gibson, C. G.
Nicolson, Hon. H. G.


Atholl, Duchess of
Gilmour, Lt.-Col. Rt. Hon Sir J.
O'Connor, Sir Terence J.


Baldwin, Rt. Hon. Stanley
Gluckstein, L. H.
O'Neill, Major Rt. Hon. Sir Hugh


Balfour, G. (Hampstead)
Glyn, Major Sir R. G, C.
Orr-Ewing, I. L.


Balfour, Capt. H. H.(lsle of Thanet)
Graham, Captain A. C. (Wirral)
Peake, O.


Balniel, Lord
Grattan-Doyle, Sir N.
Peat, C. U.


Baxter, A. Beverley
Gretton, Col. Rt. Hon. J.
Petherick, M.


Beaumont, Hon. R. E. B. (Portsm'h)
Grimston, R. V.
Pickthorn, K. W. M.


Beit, Sir A. L.
Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)
Pilkington, R.


Blindell, Sir J.
Gunston, Capt. D. W.
Plugge, L. F.


Bossom, A. C.
Guy, J. C. M.
Ponsonby, Col. C. E.


Boulton, W. W.
Hannah, I. C.
Pownall, Sir Assheton


Bower, Comdr. R. T.
Hannon, Sir P. J. H.
Radford, E. A.


Boyce, H. Leslie
Harbord. A.
Rathbone, J. R. (Bodmin)


Braithwaite, Major A. N.
Hartington, Marquess of
Reed, A. C. (Exeter)


Brocklebank, C. E. R.
Haslam, Sir J. (Bolton)
Reid, Sir D. D. (Down)


Brown, Col. D. C. (Hexham)
Heilgers, Captain F. F. A.
Remer, J. R.


Brown, Rt. Hon. E. (Leith)
Hepworth, J.
Rickards, G. W. (Skipton)


Browne, A. C. (Belfast, w.)
Herbert, Major J. A. (Monmouth)
Ropner, Colonel L.


Bull, B. B.
Hills, Major Rt. Hon. J. W. (Ripon)
Ross, Major Sir R. D. (L'nderry)


Bullock, Capt. M.
Hoare, Rt. Hon. Sir S.
Ross Taylor, W. (Woodbridge)


Butler, R. A.
Holmes, J. S.
Ruggles-Brise, Colonel Sir E. A.


Campbell, Sir E. T.
Hopkinson, A.
Runciman. Rt. Hon. W.


Cartland, J. R. H.
Hore-Bellsha, Rt. Hon. L.
Russell, A. West (Tynemouth)


Carver, Major W. H,
Horne, Rt. Hon. Sir R. S.
Salmon, Sir I.


Cary, R. A.
Horsbrugh, Florence
Salt, E. W.


Castiereagh, Viscount
Hudson, Capt. A. U. M. (Hack., N.)
Samuel, Sir A. M. (Farnham)


Cautiey, Sir H. S.
Hudson, R. S. (Southport)
Samuel, M. R. A. (Putney)


Cazalet, Theima (Islington, E.)
Hunter, T.
Sassoon, Rt. Hon. Sir P.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Inskip, Rt. Hon. Sir T. W. H.
Savery, Servington


Channon, H.
Jackson, Sir H.
Shaw, Major P. S. (Wavertree)


Chapman, A. (Rutherglen)
Jones, L. (Swansea, W.)
Shaw, Captain W. T. (Forfar)


Chapman, Sir S. (Edinburgh, S.)
Keeling, E. H.
Simon, Rt. Hon. Sir J. A.


Chorlton, A. E. L.
Kerr, H. W. (Oldham)
Smith, Sir R. W. (Aberdeen)


Christie, J. A.
Kerr, J. Graham (Scottish Univs.)
Somervell. Sir D. B. (Crewe)


Clarry, Sir Reginald
Kirkpatrick, W. M.
Somerville, A. A. (Windsor)


Colfox, Major W. P.
Lamb, Sir J. Q.
Southby, Comdr. A. R. J.


Colville, Lt.-Col. D. J.
Law, Sir A. J. (High Peak)
Spender-Clay Lt.-CI. Rt. Hn. H. H.


Cooke, J. D. (Hammersmith, S.)
Law, R. K. (Hull, S.W.)
Spens, W. P.


Cooper, Rt. Hn. A. Duff(Wst'r S.G'gs)
Leech, Dr. J. W.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Corper, Rt. Hon. T. M. (E'nburgh. W.)
Lees-Jones, J.
Stourton, Major Hon. J. J.


Craddock, Sir R. H.
Lewis, O.
Strauss. H. G. (Norwich)


Craven-Ellis, W.
Lloyd, G. W.
Strickland, Captain W. F.


Critchley, A.
Loftus. P. C.
Stuart, Hon. J. (Moray and Nairn)


Croft, Brig.-Gen. Sir H. Page
Lovat-Fraser, J. A.
Sueter, Rear-Admiral Sir M. F.


Crooke, J. S.
Mabane, W. (Huddersfield)
Tasker, Sir R. I


Cross, R. H.
MacDonald, Rt. Hn. J. R. (Scot. U.)
Tate, Mavis C.


Crowder, J. F. E.
MacDonald, Rt. Hon. M. (Ross)
Taylor, Vice-Adm. E. A. (Padd., S.)


Cruddas, Col. B.
McEwen, Capt. J. H. F.
Touche, G. C.


Cuiverwell, C. T.
McKie, J. H.
Wakefield, W. W.


Davidson, Rt. Hon. Sir J. C. C.
Magnay, T.
Wallace, Captain Euan


Davies, C. (Montgomery)
Maitland, A.
Ward, Lieut-Col. Sir A. L. (Hill)


Davies, Major G. F. (Yeovil)
Makins, Brig.-Gen. E.
Ward, Irene (Wallsend)


Davison, Sir W. H.
Margesson, Capt. Rt. Hon, H. D. R.
Waterhouse, Captain C.


Dawson, Sir P.
Markham, S. F.
Wedderburn, H. J. S.


De Chair, S. S.
Melior, Sir J. S. P. (Tamworth)
Williams, C. (Torquay)


Denman, Hon. R. D.
Mills, Sir F. (Leyton, E.)
Windsor-Clive, Lleut.-Colonel G.


Denville, Alfred
Mills, Major J. D. (New Forest)
Winterton, Rt. Hon. Earl


Dower, Capt. A. V. G.
Mitcheil, Sir W. Lane (Streatham)
Young, A. S. L. (Partick)


Duckworth, W. R. (Moss Side)
Moreing, A. C.



Duncan, J. A. L.
Morgan, R. H.
TELLERS FOR THE NOES.—


Elliot, Rt. Hon. W. E.
Morris, O. T. (Cardiff, E.)
Sir George Penny and Lieut.-


Elliston, G. S.
Morris-Jones, Dr. J. H.
Colonel Llewellin.

NEW CLAUSE.— (Appointment of collectors of taxes and collectors of land taxes.)

Sub-section (5) of section thirty-seven of the Finance Act, 1931, is hereby repealed, and the following sub-section shall be substituted therefor:—
(2) This section shall not apply to collectors in and for Scotland and Northern Ireland, or to the appointment of collectors by, or to collectors appointed by, any Commissioners acting under section sixty-nine of the Income Tax Act, 1918."—[Mr. Benson.]
Brought up, and read the First time.

5.35 p.m.

Mr. BENSON: I beg to move, "That the Clause be read a Second time."
The new Clause standing in my name, next on the Paper—(Duties of Clerk to the General Commissioners)—although not strictly consequential on this new Clause is complementary to it and with your permission, Sir Dennis, perhaps we might discuss the two together.

The CHAIRMAN: If the Committee raise no objection, it may be convenient to discuss these two new Clauses together, but it will be understood, in that event, that when the first new Clause has been disposed of the second one would not be called unless for the purposes of taking a Division upon it, should that be desired.

Mr. BENSON: The proposal in the new Clause, the Second Reading of which I now move, is purely a machinery proposal dealing with the collection of Income Tax, and the object is to bring the form of our machinery of collection into consonance with the facts of the present day. Owing to the modern developments, we find that the form of the machinery for the collection of Income Tax is, in a large number of places, out of date. Our present Income Tax system is about 130 years old. When the tax was first imposed it was regarded as a grave invasion of personal rights and was accepted only as a matter of dire necessity. In order to prevent tyranny by the Executive careful safeguards were devised along these lines—that although the tax was imposed by the Exchequer, the whole machinery of assessment and collection was local and was placed in the hands of a number of private gentlemen known as the General Commissioners. These Commissioners were appointed for specific areas and were in

actual personal possession of the machinery of assessment and collection. To this day, all books of assessment and all assessment notices remain the private property of the General Commissioner of the specific area to which they refer.
Since Income Tax was first imposed two great developments have taken place. First there is the development in the complexity of our business life and second there is the tremendous development of Income Tax law. The result of these developments is that the machinery which was adequate a century ago is not now adequate. Indeed if it were put into operation and maintained rigorously it would lead to a breakdown of the system of collection. Actually, Income Tax assessment and collection are now so complicated and technical that we have had to develop a highly-trained class of specialists. In each locality the head of the department is the inspector of taxes and he is the real assessor. He is the only person who has either the technical knowledge or the authority to settle assessments. Theoretically, however, the assessments are made by a gentleman known as an assessor who is the servant of the General Commissioners and not appointed by the Government at all.
There are, of course, many exceptions to this system. For instance in Manchester the clerk to the commissioners has abandoned all his duties except his real duty, which is to be clerk to the commissioners and to deal with appeals. In Manchester the inspector is the person to whom the taxpayer applies and by whom his assessment is settled, and an enormous amount of cumbersome and almost unworkable machinery has been got rid of there. But in other places, owing to the insistence of the clerk to the commissioners, or for some other reason, this creaking, out-of-date machinery remains. It causes considerable inconvenience and delay to the taxpayer, particularly in connection with the obtaining of rebates and repayments and it causes an equal amount of inconvenience and hindrance to the inspector of taxes who is the real lynch-pin of the machinery. The proposals which I am now making are in consonance with the report of the Commission on Income Tax and no one who reads the evidence given before that commission can deny that the reforms proposed are essential reforms.
I do not know whether hon. Members have read the evidence given to the commission on this matter. If they have not, I assure them that it is not the dull and dreary kind of evidence which is usually given before a commission dealing with such a subject as Income Tax. Indeed, it is really amusing. One of the main witnesses on this point was a gentleman named Mr. Copley Hewitt, who was clerk to the commissioners in London. He came before the commission armed cap-a-pie to fight for the maintenance of the old-fashioned machinery. I have read a fair amount of evidence but never in my experience have I read a more devastating cross-examination than that which fell to the lot of Mr. Copley Hewitt. Indeed it does not read like the report of the cross-examination of an expert witness by a group of learned commissioners. It reads for all the world like a joyous account of a dog-race with Mr. Copley Hewitt as the electric hare. If hon. Members have not read that evidence I may say that it is available to them should they wish to do so. They will find that there is an enormous amount of waste of time in the way in which documents go backwards and forwards between the commissioners, the assessor, and the inspector, and in the whole of that machinery there is only one person with either adequate technical knowledge or authority to make a decision, and that is the inspector.
I propose in these Clauses to introduce the recommendations of the Royal Commission, and I beg hon. Members opposite not to think that I am taking away any safeguards from the taxpayer. These proposals are already in operation in Manchester and in a number of other large cities, where they work smoothly and efficiently. All that I am suggesting is that we- should get rid of out-of-date machinery, dating from a century ago, which was improvised at a time when, as I say, Income Tax was regarded as a gross infringement and an invasion of private rights. These proposals would introduce efficiency in the collection of taxes, and they would be for the convenience of the taxpayer and certainly for the benefit of the Exchequer, because they would cut out an enormous amount of waste labour, hindrance, and inefficiency.

5.47 p.m.

Major HILLS: The hon. Member for Chesterfield (Mr. Benson) wishes to upset an arrangement which was come to in 1931. He is aware of the terms of that arrangement, which was made by Lord Snowden when he was Chancellor of the Exchequer, and it was enshrined in the Finance Act of 1931.

Mr. BENSON: This first new Clause is only one small portion of the whole change of machinery to which I am referring. It is the minor part of it.

Major HILLS: The special part to which I am referring is that for making the City of London a unit for tax collection. That was introduced by Lord Snowden in 1931, and he then stated very clearly why he wanted the City to be a self-contained unit. I would like to read that part of his speech from the OFFICIAL REPORT. Mr. Snowden, as he then was, said:
The reason why the City of London has been left out is that it is the largest tax-collecting centre of the country. One-sixth of the total Income Tax is collected in the City of London, and therefore they must of necessity have the most perfect organisation.
Here is the point to which I wish to draw special attention. He went on:
I have no feeling in the matter, however, and if it be the wish of the House to bring the City of London within the Bill, I am perfectly willing to do it"— [OFFICIAL REPORT, 23rd June, 1931; col. 313; Vol. 254.]
Shortly after that a Division was taken, and the hon. Member for Chesterfield voted against bringing the City of London into the Bill and for the arrangement that now prevails. I am bound to say that at that time I did not like the arrangement, and I was in the opposite Lobby. I did not like it then, but five years have gone by since then, and an agreement has been come to in the City whereby a more centralised system has been set up, and it has the complete concurrence, I understand, of the Board of Inland Revenue. The hon. Member opposite is five years too late. Mr. Snowden invited the House of Commons to express its opinion and gave a clear indication that he would be guided by what the House of Commons wanted. On that occasion the hon. Gentleman, for extremely good reasons, voted for the arrangement which he is now condemning.

Mr. BENSON: The opinions of both of us have changed in the last five years.

5.50 p.m.

Mr. HOLMES: The hon. Member for Chesterfield (Mr. Benson) said that he had derived a lot of amusement from the evidence given before the Royal Commission on Income Tax. It was amusing today to find that someone on the benches opposite was rising for the purpose of complaining, on behalf of the Income Tax payers of this country, of the present method of assessment as being insufficiently fair and of the method of collection as being insufficiently efficient. I have had a good deal of experience among the Income Tax payers of this country, and I have never yet found that any taxpayer complained that the method of assessment was inefficient or that the method of collection was not severe. As a, matter of fact, the hon. Member is right in saying that at the present time, although our ancient laws with regard to the assessment of Income Tax and collection still remain, the work is really done by the inspector of taxes in each district. In other words, as has so often happened in this country, while we allow our ancient laws to remain, we modernise the machinery and carry out the work in a thoroughly efficient manner. I venture to think that the Committee might reject these Clauses and leave the present very efficient system to continue, because, although the things to which the hon. Member referred very infrequently come into operation, they do provide a measure of protection for the individual taxpayer in cases of hardship.

5.53 p.m.

Mr. W. S. MORRISON: We have had a very interesting conversion, because the hon. Member for Chesterfield (Mr. Benson) and my right hon. and gallant Friend the Member for Ripon (Major Hills) have shown that in the course of a very short period of time they have altered their respective views on this question. I do not blame them for that, because I agree that a foolish consistency is the hobgoblin of little minds, and if these hon. Members have changed their views, that is nothing to the point. For my own part, I think the hon. Member for Chesterfield is introducing these Clauses with a sincere desire to benefit the collection and the administration of

the Income Tax, and there is no doubt, if one looks at it from the point of view of symmetry, that there is a great deal to be said for his proposals, but the short answer which I must give him is that both these matters are controversial subjects. As the hon. Member for Harwich (Mr. Holmes) has just said, the present method has worked well. It may be a little illogical, but it works well. As both these proposals of the hon. Member would be controversial, I must ask the Committee to support my right hon. and gallant Friend the Member for Ripon in the view that he takes. As they are both matters of less importance than others, I think we should not enter upon such controversial subjects at this late stage of the Bill.
It is true that in 1931 the then Chancellor of the Exchequer, Mr. Snowden, as he then was, dealt with this matter in the way stated by my right hon. and gallant Friend the Member for Ripon, and with regard to the City Commissioners, it is true that in the City of London, which is one of the great places in our country where wealth does congregate, because of the amount of business which is done there and the vast population which surrounds it, they have their own method of collection. We are looking at this matter from a revenue point of view, and there is something to be said for the City Commissioners being left alone, because they have their own special knowledge. I have come to the same conclusion as that come to by Lord Snowden, that the efforts which the Commissioners have made to reorganise their system have worked well, and as the matter is controversial and not of sufficient importance to delay the Committee, I will not go at length into the question.
But I would say a word about the other Clause in the name of the hon. Member opposite, which is a somewhat larger instalment of change. The hon. Member's Clause does not quite perfectly achieve the purpose which he desires. For example, when the Board have given a direction under the first Sub-section of the proposed new Clause, Section 175 of the Income Tax Act, 1918, ceases to have effect. If that were so, that would affect the duties of the collectors, because part of that Section deals with collectors, and I gather that it is not the hon. Gentleman's intention to inter-


fere with the collectors as such at all. If that Section would cease to have effect, as the Clause says, he would find the duties of collectors substantially interfered with. If the Clause were accepted in principle, it would have to be redrawn for our purposes, and at this late stage and for the same reasons as I adduced in regard to the City Commissioners, I think the Committee will be well advised not to give these Clauses a Second Reading.

5.58 p.m.

Mr. A. BEVAN: I am not quite sure that I understand what the proposal before the Committee actually does. I dare say that most Members of the Committee are in a better position than I am, as my relations with inspectors of Income Tax have always been of the unfriendliest kind, and I have not much knowledge of what lies behind these rather sinister gentlemen, but if my understanding of the proposal is correct, it is that whereas you have now a number of lay persons who assist the inspector in the discharge of his duties, this Clause would abolish them. My hon. Friend the Member for Chesterfield (Mr. Benson) gave us a long history of what happened in the past, but he did not put me in possession of what changes in the law are actually involved in these proposals. If it is merely a proposal to change the law because it has been 100 years or more in existence, I do not think that convinces me very much. The fact that it is old does not necessarily mean that it is wrong, and before I should vote for these Clauses, I should want a little more than either the hon. Member for Chesterfield or the Financial Secretary to the Treasury has put me in possession of. What actually is proposed to be done? This is legislation by reference, and I want to know what the changes are that are proposed.

6.0 p.m.

Sir WILLIAM DAVISON: The hon. Member asked a very natural question. The answer, apparently, is that in order to make the Income Tax collection symmetrical throughout the country the assessors of Income Tax in the City of London, a body which has performed its duties to the satisfaction of Income Tax payers and of Somerset House for a great many years, are to be abolished and no longer continue to discharge the

duties which they have been discharging for all this period. As the right hon. and gallant Member for Ripon (Major Hills) pointed out, this question was raised in 1931. It was all gone into then, and both Mr. Snowden and the House of Commons came to the conclusion that in all the circumstances, especially having regard to the fact that one-sixth of the Income Tax of the country was collected in this area, there was a body of highly skilled men with full knowledge of the facts and of the different companies and corporations in the City, which would not be known to people who were not on the spot and continually dealing with affairs in the City.
Nothing has been said by the Mover of this proposal to suggest that the present practice is in any way inefficient, and I may say that the income Taxpayers' Society, of which I am chairman, has no knowledge of any complaints on the part of Income Tax payers in the City. We are also in close touch with the Inland Revenue, and we have had no suggestion that people were being let off Income Tax who ought properly to be included in the Income Tax net. In fact, I think it is just the other way. The assessors in the City have a detailed knowledge of what is going on which enables them to keep in touch with the Inland Revenue and to see that companies and other public bodies who are liable for Income Tax are included within the Income Tax net. I hope that the Committee will follow the suggestion of the Financial Secretary, that the present system should not, on the very flimsy pretext of bringing the Income Tax collection of the country into a more symmetrical form, be altered, or that this body of assessors in the City should be abolished when it was agreed by the House in 1931 that they were performing useful work.

Mr. HOLMES: May I tell the hon. Member for Ebbw Vale (Mr. Bevan) that if he will get a copy of the Income Tax Act, 1918, and read it through from beginning to end, he will arm himself with a complete knowledge of the method of assessment and collection of Income Tax.

Mr. BENSON: I want to disabuse the minds of my hon. Friend the Member for Ebbw Vale (Mr. Bevan) and the hon. Member for South Kensington (Sir W.


Davison) that this is a proposal to strengthen in any way the hands of the executive or to take away safeguards from the taxpayer. It is purely a machinery Clause and would not give the Treasury greater power than they have at the present time.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Provisions as to exemp tion from estate duty in respect of settled property on, the death of a surviving spouse.)

The provisions of Sub-section (2) of Section five of the Finance Act, 1894, as amended by Section fourteen (a) of the Finance Act, 1914 (which gives relief from a second payment of Estate Duty on the death of a surviving spouse in respect of settled property in cases where Estate Duty has already been paid on the death of the deceased spouse), shall apply and shall he deemed to have always applied notwithstanding the provisions of the Government of Ireland Act, 1920, and of any Order in Council made in pursuance of that Act, so as to afford relief in all cases against a second payment of Estate Duty in the United Kingdom irrespective of whether the prior payment of Estate Duty was made in Great Britain or Northern Ireland and whether the property was situate at the time of such prior payment in Great Britain or Northern Ireland.—[Sir H. O'Neill.]

Brought up, and read the First time.

6.5 p.m.

Sir HUGH O'NEILL: I beg to move, "That the Clause be read a Second time."
This proposed Clause deals with a point arising out of Estate Duty. The general law is that Death Duties are paid on the death of the individual, but there is one important exception to that general law. That is, that where either a husband or wife leaves property to the other spouse, on the death of the surviving spouse the Death Duties on the same property are not paid for a second time. Recently eases have arisen as between Great Britain and Northern Ireland where Death Duties have been demanded and paid on the death of a surviving widow or widower on property which has already paid Death Duties on the death of the original settlor. The result has been that there has been a definite penalisation of certain taxpayers within the United Kingdom. I should like to give the Committee an example of cases such as I know have occurred. A man owning certain property in Northern Ireland dies. Let us assume that the property consists of a certain amount of War

Loan registered on the Belfast Register of War Loan, and of a certain number of bearer bonds deposited in a bank at Belfast. All that property is consequently Northern Ireland property. On the death of the owner, Death Duties are paid in Northern Ireland and the will provides that the property is to go to the widow for life and afterwards to certain other uses.
The widow comes to reside in London. Her trustees, never dreaming that they are doing anything to her prejudice, transfer the War Loan from the Belfast Register to the London Register and take the bearer bonds away from the bank in Belfast and deposit them in a bank in London. They do that thinking that it will be for the convenience of the widow. The widow dies and the Estate Duty Office in London claims Estate Duties on the property which had formerly paid Estate Duty in Northern Ireland on the death of the original settler. The trustees raise the point that the duties have already been paid on the death of the original settlor and that under the general law no further duties become payable on the death of the widow who had a life interest. The answer of the Estate Duty Office is that the original Death Duties were paid to the Northern Ireland Government and that they had no cognisance of that. Consequently, the duties are claimed by the British Estate Office. The rates of Estate Duty are identical. It is, of course, the fact that under the Government of Ireland Act, 1920, Estate Duty is a transferred tax; it was handed over to the Government of Northern Ireland. That Act also specifically provided against the double payment of Estate Duty.
I suggest that what has been taking place in the kind of example which I have given is a double payment of Estate Duty contrary to the whole spirit and intention of the general law and of the Government of Ireland Act, 1920. If the Government were to accept my proposal, the effect on the revenue would be insignificant. I imagine that very few of these cases have arisen and the amount of duty to be returned if my proposed Clause were carried, would be very small. As regards future claims, there will be very little loss to the revenue. In the case that I instanced the widow who came to live in London need never have had the War Loan transferred from Belfast


to London. It could have remained in Belfast and the bearer bonds could have remained where they were. The widow could still have lived in London and drawn her income, so that the transfer that took place was unnecessary. It was merely done as a supposed convenience for her and in ignorance that the property would be thereby penalised.
I suggest, therefore, that once this point has been made public people will no longer transfer property during lifetime and, consequently, there will be no loss of revenue in future. If the principle of my suggested Amendment were accepted by the Government, there would have to be reciprocal and similar legislation by the Government of Northern Ireland. I have no doubt that my hon. and learned Friend in any case, whatever his view may be about this proposal, will have to consult with that Government, but I cannot imagine that he will find any difficulty there in putting right what I think is a definite injustice. The United Kingdom is one; Northern Ireland is just as much a part of it as is Wales and Scotland; and I hope that it will be possible for this injustice, which has quite fortuitously arisen, to be put right.

6.13 p.m.

Mr. W. S. MORRISON: I have listened with sympathy to the speech of my right hon. Friend. I think that he has foreseen some of the objections to a proposal to include this new Clause in the Bill at this stage. The first objection which occurs to me is the fact that under the Government of Ireland Act Estate Duty is a transferred tax and by Clause 29 (6) of the present Bill it is provided that
such of the provisions of this Act as relate to matters with respect to which the Parliament of Northern Ireland have power to make laws shall not extend to Northern Ireland.
I apprehend the result will be that this proposal could not be made reciprocal without some corresponding legislation on the other side. My right hon. Friend does not suggest that a one-sided bargain like this could be entered into. There is also the further grave objection to our taking a step which might affect the finances of Northern Ireland without consultation with that Government. There is the objection, too, that the Clause appears to be retrospective, and I view that with some apprehension. I cannot,

therefore, advise the Committee to give the Clause a Second Reading. I undertake to say, however, that I will examine this matter with sympathy and will consult with the Government of Northern Ireland to see whether we cannot get the principle which the right hon. Gentleman has urged without some of the objections to which I have drawn attention. I hope that that will satisfy my right hon. Friend.

6.15 p.m.

Mr. FOOT: I rise only to make one observation, which arises out of a remark made by the right hon. Member for Antrim (Sir H. O'Neill). He made the observation, which interested me very much, that the United Kingdom is one, and that Northern Ireland is as much a part of the United Kingdom as Scotland or Wales. I hope that he will continue to take that view. I hope he will take it when on any future occasion in this House he raises the Special Powers Act passed by the Northern Ireland Government, under which a state of virtual despotism exists there.

6.16 p.m.

Miss WILKINSON: The Financial Secretary has said that he will give sympathetic consideration to the proposal before us and I wish to ask him a question on one point. Do I understand that if a widow enjoys a life interest in a sum of money left in this way for a period of 20 or 30 years, it is still exempt from paying Estate Duty on her death? Surely after the lapse of such a period Death Duties ought to be paid on the money in precisely the same way as on any other money. Why, because it has been left on the terms of a life interest, and duty has been paid on it once, should it be exempt from duty in the future?

6.17 p.m.

Sir STAFFORD CRIPPS: The Financial Secretary has, I understand, expressed the view that on a matter of legislation such as this it is quite competent, and, indeed, proper for a Minister in this Government to get into negotiation with a Minister in the Northern Ireland Government with a view to concerting measures for the protection of the subject—the subject who is dead. I should like to ask him whether, when he is engaged in those negotiations, he will extend them to the welfare of the living subject in Northern Ireland as well as


the dead subject, and whether he will make it a condition of coming to any arrangement by which the inhabitants of Northern Ireland get this advantage that the legislation at present in force in Northern Ireland with regard to the suppression of the subject shall be withdrawn.

6.19 p.m.

Mr. W. S. MORRISON: The hon. and learned Member for East Bristol (Sir S. Cripps) wishes to drag me from my own wide enough territory into a region where I am not so much at home. I think the only way in which I can deal with the point he has raised is to repudiate in toto all the suggestions he has made and to say that I cannot undertake to go outside my ordinary duties in regard to this question of the Estate Duty. In reply to what the hon. Member for Jarrow (Miss Wilkinson) said, the hon. Lady should understand that this exemption from Estate Duty applies only to settled property in the case of spouses, where duty had been paid on the death of a husband or wife. It is only in such circumstances that the Estate Duty is not again charged on death of the other spouse. That treatment is not out of accord with the fact that for purposes of Income Tax the incomes of a husband and wife are aggregated. The provision in this proposed new Clause applies only to Estate Duty on settled property, but in the general Income Tax law there is, of course, the general provision that for the purposes of taxation of income husbands and wives are regarded as one person.

Sir H. O'NEILL: When my hon. and learned Friend says that he will give this matter sympathetic consideration with a view, if possible, to remedying the grievance I take it that means that any existing demands which have been made and which are now outstanding will be held over until some decision is reached?

Mr. MORRISON: I am afraid I do not quite appreciate what my right hon. Friend means by that question. All that I have undertaken to do is to consult with the appropriate Department in the Government of Northern Ireland to see whether on this proposal—with the principle of which I have some sympathy, though I cannot accept the wording of the Clause—we cannot arrive at some reciprocal arrangement which might make

it possible to give effect to it. That is all I can undertake to do, and my undertaking extends to nothing beyond the contents of the Clause.

6.22 p.m.

Mr. CHARLES WILLIAMS: Will my hon. and learned Friend hasten these discussions with the Northern Ireland Government so that, if possible, we may get something on the Report stage which will remedy what, quite clearly, is an accident in the law creating an injustice? It is clearly a technical flaw which should be remedied. I do not ask him to give an undertaking, but I hope that he will go into the matter with the greatest promptitude.

6.23 p.m.

Mr. MacLAREN: A promise has been given by the Financial Secretary which I hope will be clearly understood not only in its fullness but in its restrictions. I take it that the Financial Secretary, by giving an undertaking to go into this matter, has not pledged himself to deal with this matter retrospectively.

Mr. W. S. MORRISON: One of the objections to which I drew attention was the element of retrospection in the Clause.

Sir H. O'NEILL: I thought it was only fair that the Clause should be retrospective. This is a matter which has only arisen within the last year. In view of what my hon. and learned Friend has said as to giving the subject sympathetic consideration I ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.— (Income tax relief in re spect of Territorial Army pay, allow ances, and grants.)

For income tax purposes the income of any person (other than a member of the permanent staff of the Territorial Army) shall not be deemed to include any sums received by him on account of pay, or allowances, or proficiency grants in respect of any period of training or service in the Territorial Forces authorised under the Territorial and Reserve Forces Act, 1907, and the Territorial Army and Militia Act, 1921.— [Major Stourton.]

Brought up, and read the First time.

6.24 p.m.

Major STOURTON: I beg to move, "That the Clause be read a Second time."


The object of this Clause is to exempt from taxation the pay of all officers and other ranks of the Territorial Army received for training periods, except, of course, the pay of the permanent staff. The Committee are well aware that the Territorials are, in fact, civilians who carry out patriotic, essential and voluntary duties in defence of their country. It always strikes me, as being a case of base ingratitude on the part of the State to tax what, at any rate in the case of officers, is really a contribution towards expenses incurred upon national service. We already have a precedent in the case of Members of this House who receive £100 a year of their salary tax free, and this concession can be extended to the full £400 where Members can prove that they have, in fact, spent up to that amount in the discharge of their duties. Therefore, I am only asking on behalf of the Territorials what is already conceded to Members of Parliament
Anyone who has had any connection with the Territorial Army knows that at any rate in the case of officers of the higher ranks—captain and above—their essential expenses are considerably in excess of what they receive by way of pay. Perhaps I may cite one or two instances to show how the money is spent. Principally it is spent on travelling about the areas in which the units are situated. Then there is the cost of contributing to prizes for sports and shooting, as well as towards the cost of "socials," recruiting marches and so on. As things stand at present officers receive £7 10s. a year free of tax as a contribution towards the upkeep of their uniform. Other ranks receive no tax remission whatever, and as I understand it will have to pay Income Tax on the new marriage allowance which is to be conceded to them.
So far as I can make out the cost of granting the concession for which I ask would be a trifling matter from the Treasury point of view. There are at the present time 7,452 officers of the Territorial Army, and as the average period of training is only 14 days it requires no expert mathematician to work out that the sum involved would be a very small one. Exactly what it would be it is impossible to compute, because of the variations in assessment to tax in individual cases, but I think I am reason-

ably correct in asserting that the cost of such a concession would not be in excess of £10,000, and probably less. The Committee will recollect that on Wednesday of last week the Chancellor declared that he was of a yielding nature. He is not in his place at the moment, but I hope that the Financial Secretary, acting on his behalf, will be able to prove that that statement was correct.

6.27 p.m.

Brigadier-General Sir HENRY CROFT: I would urge my hon. and learned Friend to give sympathetic consideration to this proposal. I think the case has been very fairly stated by my hon. and gallant Friend, and I feel that the public would wish this Committee to do everything in their power to encourage what I claim to be one of the most deserving sections of the population of this country. I remember that after the War, when I was asked to reconstruct the battalion in my county, I had experiences such as the hon. and gallant Member has mentioned. As a commanding officer in a big county with detachments all over the place, I found at the end of the year that my pay was far more than eaten up in the endeavour to keep touch with those detachments, and by the various little expenses involved. That is the general case throughout the country. The Committee ought to realise that officers of the Territorial Army are not, as a rule, men of great means.
This would be a small concession, but it would be an indication that Parliament does appreciate the sacrifice and service given by this small number of persons, and I feel that it would be immensely appreciated throughout the whole of the Army. We read the other day a congratulatory speech from the Secretary of State for War—it was an alarming speech in some ways—in which he mentioned that 6,000 additional recruits had been found for the Territorial Army in the last month, but I read in to-day's papers the statement that 588,000 additional Italians had joined the Fascist Militia since May. It is because our forces are so small and that it is so essential to have trained men willing to give their services to the country in this way that I urge my hon. and learned Friend to consider this most reasonable proposal.

6.30 p.m.

Mr. W. S. MORRISON: I have the utmost sympathy with the object sought by the two hon. and gallant Members who have addressed the Committee, and both my right hon. Friend and I would gladly take any step that was practicable in order to encourage the Territorial Force and those serving in it, but I doubt whether this proposal is the right way to do it. The present position of officers serving in the Force is that certain allowances are paid which are not taxed. The Secretary of State for War has recently announced increases in those allowances which will help the position of young men who, as has been said, have no great means. I think that is the way to encourage the object of the supporters of the proposed new Clause, and not by giving a relief from Income Tax which is granted to no other section of the community.

Major STOURTON: Members of Parliament.

Mr. MORRISON: No, Members of Parliament are on no different basis. They receive their salaries and they are allowed an amount to pay expenses. That is the general rule. It is true that, for the purposes of convenience in some cases, allowances are made in the way that hon. Gentlemen have said prevails, but that is not a breach in the ordinary Income Tax rule. The pay of a Territorial officer is pay; whether it is enough pay is another matter. If hon. Members wish to increase the pay that would be an entirely different question, but, being pay, it would be subject to Income Tax, which applies to all pay. I do not see that I am justified in accepting the proposed new Clause.
Apart from increased allowances, a flat rate deduction of £7 10s. for the upkeep of uniform is always made in assessing Territorial officers' pay. The general condition which I have pointed out applies equally to the pay of Territorial officers and to the pay of Members of Parliament, that is to say, if an officer can prove that he has incurred extra expenses within the meaning of the Income Tax rule, in order to do service and earn the pay, he is entitled, like any other subject, to have the excess allowed in his assessment. I do not think this particular matter can be considered a deterrent to recruiting. The amount of

tax involved is very small, and I cannot perceive that any young man who had come to the conclusion that it was his duty to serve his country in this very necessary fashion would be deterred by the fact that the very small sums he received for pay would be assessed for Income Tax. For those reasons I feel that I cannot accept the proposed new Clause.

6.34 p.m.

Mr. RADFORD: I was very disappointed when I heard the reply of the Financial Secretary to the Treasury. The Mover and Seconder of the proposed new Clause spoke as Territorial officers of experience, and testified that the pay and other allowances which they received had not been sufficient to pay their expenses, and that they have often been out-of-pocket in carrying out their duties as Territorial officers. I am also quite unable to see where the differentiation lies between the remuneration of Members of Parliament and the pay of Territorial officers.

Mr. W. S. MORRISON: There is none.

Mr. RADFORD: Then that gives additional support to our request on behalf of Territorial officers. Would the Financial Secretary consult with his right hon. Friend the Chancellor of the Exchequer with a view to allowing these officers the same right as is possessed by Members of Parliament? A certain allowance is given to us above our salary, calculated as the expenses we have incurred. We have to satisfy the Income Tax authorities that our out-of-pocket expenses exceeded the figure which is allowed. If the Territorial officers had the same right, when their expenses had wiped out all their pay and allowances the concession asked for by my hon. Friend would make everything satisfactory.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Extension of s. 1 (3) of the Finance Act, 1935, to outdoor sports.)

There shall be added to Sub-section (3) of Section one of the Finance Act, 1935, the words: "a football or cricket match or other athletic or sporting contest or exhibition."—[Mr. Foot.]

Brought up, and read the First time.

6.37 p.m.

Mr. FOOT: I beg to move, "That the Clause be read a Second time."
It will be within the recollection of the Committee that in Section 1 of the Finance Act of last year we abolished the Entertainments Duty altogether on seats up to 6d., and that a reduced rate of duty was allowed on seats of higher prices at certain classes of entertainments, which included theatres, ballets, musical performances, lectures, music halls, variety entertainment and circuses. I am proposing now that this reduced rate of Income Tax should be applicable to football and cricket matches and other sporting contests or exhibitions. Last year, the Chancellor of the Exchequer drew a distinction between one kind of entertainment and another, between the entertainment which employed living players and the entertainment of the screen. I am not saying now whether that distinction was right or wrong or was a logical distinction. It was drawn, and it must be clear to hon. Members that the forms of entertainment to which I refer in the proposed new Clause fall upon one side of that line; they are in the same category as stage plays, in so far as they employ living players. I can speak as a football fan of a good many years standing. For many years I never missed a home match of Plymouth Argyle, and now that I have moved farther North I have spent a good many of my Saturdays watching either Dundee or Dundee United. If I choose to spend Saturday afternoons in watching a League football match, why should a heavier rate of tax be imposed than if I chose to spend it at a matinee performance at a music hall? It seems to me that there is no distinction at all. It cannot be supported by the distinction which the Chancellor of the Exchequer drew last year.
I do not wish to pursue this matter at any great length, and I am going to refer only to League football clubs. It is entirely a mistake to imagine that all League football clubs make considerable profits. I dare say hon. Members are aware that a good many clubs are run at a loss, sometimes year after year. I have the figures here of 82 out of 88 clubs in the English Football League, and in the season 1934 to 1935, only 36 of those clubs showed a profit at the end of the season; and 46 showed a loss. The total profits of the 36 clubs were, in round figures,

£105,500, and the losses of those who lost money were £94,900. That is the kind of proportion which exists between the profits and losses. The Entertainments Duty that had to be paid by all those clubs was £261,600. Those figures show that to football clubs, and I have no doubt to other forms of exhibition and contest to which I refer in the Clause, the Entertainments Duty has become an extremely heavy burden. I am not proposing that the whole of it should be remitted, but that the same concession should be given which was given 12 months ago to other forms of entertainment.

6.42 p.m.

Mr. R. C. MORRISON: Football clubs are not in the same category as cinematograph entertainments. The Financial Secretary may not be aware that the profits made by football clubs are strictly limited by the Football Association. Prosperous clubs are not allowed to distribute more than 7½ per cent. on their share capital, and I should be very surprised if more than half-a-dozen of the clubs in the country distributed that amount. I suggest that that fact should be taken into consideration. There is a certainty that the whole of the benefit from any concession would be passed on to the people who patronise football matches, and would not go to enrich shareholders.

6.43 p.m.

Mr. K. GRIFFITH: I commend this proposal to the Financial Secretary because the people on whose behalf the new Clause has been proposed are performing a great public service. Where there is depression, a football match particularly, and a cricket match in the summer, are potent instruments in lightening depression for many people who are passing through unfortunate and stringent times. Football and cricket qualify in exactly the same way as do other entertainments for the relief that has already been given. The policy has already been adopted to some extent of encouraging living performers. The mere accident that the performance is given out of doors should not operate against those who are performing in the open air. I am sure that the Financial Secretary feels sympathy with a proposal of this kind, and if encouragement is given, it will have a beneficial effect, not merely on those who


are engaged in the sport, but upon large numbers of spectators who look forward during the week to these athletic performances. I think the proposal should be pressed with all the force that the Committee has in its power.

6.44 p.m.

Mr. W. S. MORRISON: I am quite prepared to give consideration to this matter, and as much sympathy as the hon. Member desires. Every Member of the Committee wishes that we could do something to get more people to take part in these sports for health and pleasure. Whether my sympathy should be allowed to exert itself at the expense of the revenue is a different matter. The new Clause proposed to-day is an example of what has been said so often by my right hon. Friend and myself in the course of the Debates, that one concession leads to another in unvarying continuity.
The Clause asks that a concession made in the Finance Act, 1935, should be extended to cricket and football matches and other forms of sporting entertainment. I would point out, however, that the concession made in 1935 was a concession made to living theatrical, variety, and musical entertainments, and, in considering whether that concession should be extended to cricket and football matches, I would ask the Committee to remember what it was that caused my right hon. Friend in that year to make the concession. It was undoubtedly the fact that a new and powerful competitor with living dramatic entertainments had entered the field in the form of the cinema—the talking pictures. I do not think it can be said, however, that the ground on which my right hon. Friend made that concession last year applies to cricket or football. It cannot be said that the rival attraction of film stars will draw men away from observing the activity of Tottenham Hotspur or any other club of that kind. The two things are on different planes, and the fact that a concession is given to one particular form of entertainment, which is threatened by a danger, is not a reason for extending it to an entertainment which is not so threatened. The Clause affords an example of the way in which one concession is used as a crowbar to lever open the coffers of the State on another occasion.
There is a further point to be borne in mind. When my right hon. Friend made that concession last year, it was done, not because the people who went to see those entertainments were penalised, but because that kind of entertainment had become commercially unprofitable owing to the competition of the cinema, and, as a result, unemployment among living artists was on the increase, and distress was represented to be existing in the industry because of the cinema competition. The hon. Member who moved the Clause gave some figures about the relative state of prosperity of certain clubs, showing that some of them are prosperous and others are not. I think, however, that that is true of practically any form of entertainment in the country. It is true of the cinema and of other forms of entertainment. But that is no reason for extending to this particular form of entertainment a concession which, does not apply to it. For these reasons I am bound to say that the Clause does not appear to be properly founded upon the concession of last year. Moreover, I may tell the Committee that it is extremely difficult to estimate what would be the cost of this extension of the concession. If it were extended to cricket and football matches, athletic meetings, and also to sporting contests of any kind—which I presume would include dog races, horse races, and all that sort of thing—the cost could not be less than £250,000 a year. I do not think the hon. Member has shown that there is the same case for excluding cricket and football matches and other forms of sporting entertainment as there was for making the concession last year in the case of entertainments provided by living performers.

6.50 p.m.

Sir S. CRIPPS: I do not think that the excuses which have been offered by the Financial Secretary are valid. I am afraid I cannot speak as a football "fan"; I have always considered that those people who are heroic enough to spend a winter afternoon sitting still in the open ought to be rewarded for it rather than charged for it. But I still regard this sport as one of the great methods for the mass enjoyment of the people of Great Britain, and there is no doubt that it provides, as the hon. Member for West Middlesbrough (Mr. K.


Griffith) has said, a very valuable outlet in times of depression and in times when there is very little else that people in areas like Durham and South Wales can find to relieve their anxieties. The Financial Secretary spoke about trying to lever open the coffers of the State—a very picturesque phrase, but one with no reality at all. The question is, how far the Chancellor of the Exchequer should be allowed to lever open the coffers of the football clubs, and the fact that he has done it too extensively in the past is no precedent for his being allowed to continue to do it. The real problem here is not that of taking something from the Chancellor of the Exchequer, but whether this Committee is going to allow him to continue to take away money from the spectators of football and other matches.
The Financial Secretary said that in this case there was no competition from the films, but of course there is competition from the news reel. Many people go to watch football matches on the screen in the afternoon or evening of the day on which they are played, and there is a very direct competition between that type of exhibition of sporting entertainments and the direct and self-sacrificing task of going into the open on a cold day to watch them. There is quite as much competition in these cases as there is between the theatre and the picture-house. [HON. MEMBERS"No!"] I think there is. I know many people who see all the football that they ever see by seeing it in the cinema, and many of them go there to see the news reel in order to see the sporting events. There is to-day a number of these smaller cinematograph houses where current

topics are shown continuously, and where people go for the specific purpose of seeing the Boat Race or other sporting events of a similar character. There is no doubt that there is considerable competition in that way. Obviously, it is a more healthy occupation, for those who can stand it, to see these sporting events in the open air and to form part of the direct audience rather than of a vicarious audience sitting in a stuffy entertainment house.

Therefore, I suggest to the Chancellor of the Exchequer that this, not extension of the principle, but this granting to the football and cricket clubs of a right which has been already granted to the music-hall and the theatre, is clearly justified by the interests of the people and of the State itself. I am not interested in the sporting contests part of the Clause, and I am sure that, if that were the only objection, the Mover of the Clause would be prepared to delete it if it covered dog racing and things of that sort; but, as I understand it, the main object of the Clause is to give a remission in regard to the tax on seats between 6d. and 1s. 9d., or whatever the figure is, in the case of football, cricket and athletic clubs. I should have thought that that would not have been a very expensive thing for the Chancellor to do. The sum entailed cannot be very large, and the benefit that would flow from it in the matter of the entertainment of the people of this country would in my opinion be a very real one.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 124; Noes, 217.

Division No. 242.]
AYES
[6.55 p.m.


Adams, D. (Consett)
Cocks, F.S.
Groves, T. E.


Adams, D. M. (Poplar, S.)
Compton, J.
Hall, G. H.(Aberdare)


Adamson, W. M.
Cove, W. G.
Hall, J. H.(Whitechapel)


Alexander, Rt. Hon. A. V(H'lsbr.)
Cripps, Hon. Sir Stafford
Hardie, G. D.


Anderson, F.(Whitehaven)
Daggar, G.
Harris, Sir P. A.


Attlee, Rt. Hon. C.R.
Dalton, H.
Henderson, J. (Ardwlck)


Banfield, J. W.
Davies, D. L. (Pontypridd)
Henderson, T. (Tradeston)


Barnes, A. J.
Davies, S. O. (Merthyr)
Hills, A. (Pontefract)


Barr, J.
Day, H.
Holdsworth, H.


Bellenger. F.
Dobbie, w.
Holland, A.


Benson, G.
Ede, J. C.
Jagger, J.


Bevan, A.
Edwards, Sir C. (Bedwellty)
Jenkins, A. (Pontypool)


Broad, F. A.
Evans, D. O. (Cardigan)
Jenkins, Sir W. (Neath)


Bromfield, W.
Evans, E. (Univ. of Wales)
Johnston, Rt. Hon. T.


Brooke, W.
Frankel, D.
Jones, A. C. (Shipley)


Brown, Rt. Hon. J. (S. Ayrshire)
Gardner, B. W.
Jones, H. Haydn (Merioneth)


Buchanan, G.
George, Major G. Lloyd (Pembroke)
Kelly, W. T.


Burke, W. A.
George, Megan Lloyd (Anglesey)
Kennedy, Rt. Hon. T.


Cape, T.
Gibblns, J.
Kirkwood, D.


Cassells, T.
Graham, D. M. (Hamilton)
Lathan, G.


Charleton, H. C,
Greenwood, Rt. Hon. A.
Leach. W.


Crater, D.
Grenfell, D. R.
Lee, F.


Cluse, W.S.
Griffiths, G. A. (Hemsworth)
Leonard, W.




Leslie, J. R.
Parker, J.
Strauss, G. R. (Lambeth, N.)


Logan, D. G.
Parkinson, J. A.
Taylor, R. J. (Morpeth)


Lunn, W.
Pethick-Lawrence, F. W.
Thurtle, E.


Macdonald, G. (Ince)
Potts, J.
Tinker, J. J.


McEntee, V. La T.
Price, M. P.
Vlant, S. P.


McGhee, H. G.
Richards, R.(Wrexham)
Walkden, A.G.


Maclean, N.
Ritson, J.
Watkins, F. C.


MacNeill, Weir, L.
Roberts, Rt, Hon. F. O, (W. Brom.)
Watson, W. McL,


Marklew, E.
Roberts, W. (Cumberland, N.)
Westwood, J.


Mathers, G.
Robinson, W. A. (St. Helens)
White, H. Graham


Maxton, J.
Salter, Dr. A.
Whiteley, W.


Messer, F.
Seely, Sir H.M.
Wilkinson, Ellen


Montague, F.
Sexton, T. M.
Williams, E.J. (Ogmore)


Morrison, Rt. Hn. H.(Ha'kn'y, S.)
Short, A.
Williams, T.(Don Valley)


Morrison, R. C. (Tottenham, N.)
Sinclair, Rt. Hon. Sir A. (C'thn's)
Young, Sir R.(Newton)


Muff, G.
Smith, Ben (Rotherhithe)



Naylor, T. E.
Smith, E. (Stoke)
TELLERS FOR THE AYES—


Oliver, G. H.
Smith, Rt. Hon. H. B. Lees- (K'ly)
Mr. Dingle Foot and Mr. Kingsley


Owen, Major G.
Smith, T. (Normanton)
Griffith.


Paling, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)





NOES.


Adams, S. V. T. (Leeds, W.)
Dawson, Sir P.
Lumley, Capt. L. R.


Agnew, Lieut.-Comdr. P. G.
De chair, S. S.
MacDonald, Rt. Hn. J. R. (Scot. U.)


Albery, I. J.
Denman, Hon. R. D.
MacDonald, Rt. Hon. M.(Ross)


Amery, Rt. Hon. L. C. M. S.
Denville, Alfred
Macdonald, Capt. P. (Isle of Wight)


Anderson, Sir A. Garrett (C. of Ldn.)
Dorman-Smith, Major R. H.
McEwen, Capt. J. H. F.


Anstruther-Gray, W. J.
Duckworth, W. R. (Moss Side)
McKie, J. H.


Aske, Sir R. W.
Duggan, H. J.
Macmillan, H. (Stockton on-Tees)


Atholl, Duchess of
Duncan, J. A. L,
Magnay, T.


Balfour, G. (Hampstead)
Eastwood, J. F.
Maitland, A.


Bainlel, Lord
Edmondson, Major Sir J.
Makins, Brig.-Gen. E.


Barclay-Harvey, C. M.
Emrys-Evans, P. V.
Margesson, Capt. Rt. Hon. H. D. R.


Baxter, A. Beverley
Erskine Hill, A. G.
Markham, S. F.


Belt, Sir A. L.
Everard, W. L.
Mason, Lt.-Col. Hon. G. K. M


Bennett, Capt. Sir E. N.
Findlay, Sir E.
Mayhew, Lt.-Col. J.


Bernays, R.H.
Fremantle, Sir F. E.
Mellor, Sir J. S. P.(Tamworth)


Birchall, Sir J. D.
Ganzonl, Sir J.
Mills, Sir F. (Leyton, E.)


Blaker, Sir R.
Gibson, C. G.
Mills, Major J D. (New Forest)


Blindell, Sir J.
Gilmour. Lt.-Col. Rt. Hon. Sir J.
Mitchell, Sir W. Lane (Streatham)


Bossom, A. C.
Gluckstein, L. H.
Moreing, A. C.


Boulton, W. W.
Graham Captain A.C.(Wirral)
Morgan, R. H.


Bower, Comdr. R.T.
Grattan-Doyle, Sir N.
Morris, O. T. (Cardiff, E.)


Boyce, H. Leslie
Gritten, W. G. Howard
Morrison, W. S. (Cirencester)


Braithwalte, Major A. N.
Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)
Munro, P.


Brass, Sir W.
Guinness, T. L. E. B.
Neven-Spence, Maj. B. H. H.


Brocklebank, C. E. R.
Gunston, Capt. D. W.
Nicolson, Hon. H. G.


Brown, Col. D. C. (Hexham)
Guy, J. C. M.
O'Connor, Sir Terence J.


Brown, Rt. Hon. E.(Leith)
Hacking, Rt. Hon. D. H.
O'Neill, Major Rt. Hon. Sir Hugh


Bull, B. B.
Hanbury, Sir C.
Orr-Ewing, I. L.


Bullock, Capt. M.
Hannah, I. C.
Palmer, G. E. H.


Butler, R. A.
Hannon, Sir P.J. H.
Patrick, C. M.


Campbell, Sir E. T.
Harbord, A.
Peake, O.


Carver. Major W. H.
Hartington, Marquess of
Peat, C. U.


Cautley, Sir H. S.
Haslam, Sir J.(Bolton)
Penny, Sir G.


Cayzer, Sir C. W. (City of Chester)
Hepburn, P. G. T. Buchan-
Perkins, W. R. D.


Cazalet, Thelma (lslington, E.)
Herbert, Major J. A.(Monmouth)
Petherick, M.


Cazalet, Capt. V. A. (Chippenham)
Hills, Major Rt. Hon. J. W. (Ripon)
Picktnorn, K. W. M.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Holmes, J. S.
Ponsonby, Col. C.E.


Channon, H.
Hope, Captain Hon. A. O. J.
Pownall, Sir Asaheton


Chapman, A. (Rutherglen)
Hopkinson, A.
Radford, E. A.


Chapman, Sir S. (Edinburgh, S.)
Horsbrugh, Florence
Raikes, H. V. A. M.


Choriton, A. E. L.
Hudson, Capt. A. U. M. (Hack., N.)
Rathbone, J. R. (Bodmin)


Christie, J. A.
Hume, Sir G. H.
Rayner, Major R. H.


Clarry, Sir Reginald
Hunter, T.
Reed, A. C. (Exeter)


Colfox, Major W. P
Jackson, Sir H.
Reid, Sir D. D. (Down)


Colville, Lt.-Col. D. J.
James, Wing-commander A. W.
Remer, J. R.


Cooke, J. D.(Hammersmith, S.)
Jones, Sir G. W. H. (S'k N'w'gt'n)
Rickards, G. W.(Skipton)


Cooper, Rt. Hn. A. Duff(W'st'r S.G'gs)
Jones, L. (Swansea, W.)
Ross Taylor, W. (Woodbridge)


Cooper, Rt. Hn. T. M.(E'burgh, W.)
Keeling, E. H.
Ruggles-Brise. Colonel Sir E. A.


Courthope, Col. Sir G. L.
Kerr, H. W. (Oldham)
Russell, A. West (Tynemouth)


Craddock, Sir R. H.
Kerr, J. Graham (Scottish Univs.)
Russell, S. H. M. (Darwen)


Critchley, A.
Kirkpatrick, W. M.
Salmon, Sir I.


Croft, Brig.-Gen. Sir H. Page
Lamb, Sir J. Q.
Salt, E. W.


Crooke, J. S.
Law, Sir A. J.(High Peak)
Samuel, Sir A. M.(Farnham)


Crookshank, Capt. H. F. C.
Leech, Dr. J. W.
Shaw, Major P. S. (Wavertree)


Croom-Johnson, R. P.
Lees-Jones, J.
Shaw, Captain W. T. (Forfar)


Cross, R. H.
Lewis, O.
Shute, Colonel Sir J. J.


Crowder, J. F. E.
Lindsay, K. M.
Simon, Rt. Hon. Sir J. A.


Cruddas, Col. B.
Little, Sir E. Graham-
Smith, Sir R. W. (Aberdeen)


Culverwell, C. T.
Lloyd, G. W.
Somervell, Sir D.B.(Crewe)


Davidson, Rt. Hon. Sir J. C. C.
Locker-Lampson, Comdr. O. S.
Somerville, A. A. (Windsor)


Davies, Major G. F. (Yeovil)
Loftus, P. C
Somerville, D. G. (Willesden, E.)


Davison, Sir W. H.
Lovat-Fraser, J. A.
Southby, Comdr. A. R. J.







Spears, Brig. Gen. E. L.
Touche, G. C.
Windsor-Clive, Lieut.-Colonel G.


Spens, W. P.
Tryon, Major Rt. Hon. G. C.
Winterton, Rt. Hon. Earl


Stanley, Rt. Hon. Oliver(W'm'I'd)
Tufnell, Lleut.-Com. R. L.
Wise, A. R.


Stourton, Major Hon. J. J.
Wakefield, W. W.
Withers, Sir J. J.


Strauss, E. A. (Southwark, N.)
Wallace, Captain Euan
Wolmer, Rt. Hon. Viscount


Strauss, H. G. (Norwich)
Ward, Lleul.-Col. Sir A. L. (Hull)
Wood, Rt. Hon. Sir Kingsley


Strickland, Captain W. F.
Ward, Irene(Wallsend)
Young, A. S. L. (Partick)


Stuart, Hon. J. (Moray and Nalrn)
Waterhouse, Captain C.



Sueter, Rear-Admiral Sir M. F.
Wedderburn, H. J. S.
TELLERSFOR THE NOES.—


Tasker, Sir R. I.
Wells, S. R.
Dr. Morris-Jones and Lieut.-Colonel


Tate, Mavis C.
Williams, C. (Torquay)
Llewellin.


Taylor, Vice-Adm. E. A. (padd., S.)
Williams. H. G. (Croydon. S.)



Question put, and agreed to.

NEW CLAUSE.—(Amendment of s. 18 of Finance Act, 1932.)

Section eighteen of the Finance Act, 1932 (which provides for additional deductions in respect of wear, and tear of any machinery or plant during any year of assessment), shall have effect as if the word "one-fifth" were substituted for the word "one-tenth."—[Mr. Foot.]

Brought up, and read the First time.

7.1 p.m.

Mr. FOOT: I beg to move, "That the Clause be read a Second time."
This is a somewhat different Clause from the last one I moved. It deals with an amendment of Section 18 of the Finance Act, 1932. I have no doubt that the Chancellor of the Exchequer regards this Clause or something like it as a hardy annual, because something of this kind is raised each year. We consider that it is an important matter, and we put this down as a sort of token Clause. It does not represent all that we want or all the changes we should like to see in the system of depreciation allowances. It is simply a way in which we can call attention to the operation of that system. Section 18 of the Finance Act, 1932, provided that wear and tear allowances should be increased in every case by one-tenth. This Clause would make it one-fifth. Instead of a 10 per cent. increase, there would be a 20 per cent. increase.
It is high time that our system of wear and tear and obsolescence allowances was overhauled. On former occasions, in bringing forward a proposal of this kind on the Finance Bill, I have given the Committee such figures as I have been able to obtain showing the difference in the allowances made in this country and in some other countries. In this country, as a general rule, it is true to say that the wear and tear allowance amounts to 8¼ per cent. or thereabouts on the declining value of the machinery. In France, Belgium and Italy it amounts to

10 per cent. of the original value. In Germany, as I understand, it was until recently 20 per cent. in the first year and 8 per cent. on the declining value thereafter. In the last year or two in Germany, I understand, arrangements even more advantageous have been made. Last year I was told by the Financial Secretary to the Treasury, now the Secretary of State for War, that there was no exact comparison, and that figures like these were slightly misleading because there were differences between the Income Tax system in one country and that in another.
The figures I am putting to the Committee have been obtained for me by a manufacturer in my constituency who has been at the greatest pains to arrive at comparable figures, and they are endorsed by representatives, whom I have seen, of the Association of British Chambers of Commerce. They show that there is a considerable difference to the advantage of the foreigner as between the allowances given in this country and the allowances given elsewhere. But even supposing it is not possible to make exact comparisons between this country and other countries, I submit that a system which met the needs of industry quite adequately 20 years ago is entirely unsuitable to the needs of industry to-day. Only a short time ago in this House we were discussing the Employment of Women and Young Persons Bill and one of the reasons given in support of the two-shift system was the shorter life of machinery in these days as compared with a few years ago. It was said by the spokesman on that Bill—and I entirely agree with him—that because machinery is so much more expensive and its life so much shorter, it was necessary to work the machines for 16 hours out of the 24, instead of only eight. If that be true—it was an argument put forward from the Government Benches—it is an argument which certainly supports the Clause which I am bringing forward.
After all we always have in any progressive society a change-over from one set of industries to another. There is always a state of affairs in which you have certain industries declining and other industries taking their place. In the last few years in this country it is the heavy industries which have shown a tendency to decline, and the new and lighter industries which have shown a tendency to increase, and to re-absorb the unemployed we have to look in the direction of the lighter industries, who use lighter machinery. It is precisely because of that great increase of lighter machinery that we need some overhaul of our system of wear and tear allowances, because it depreciates much faster than the heavy machinery which was more in use 10 or 15 years ago. I know that it may be said that if the machinery does not last so long, that will not make so much difference, because when the machine comes to an end the manufacturer is able to claim the obsolesence allowance. That is true in some cases, but I do not think it entirely compensates.
The distinction which the supporters of the Clause make is that the manufacturer can claim only the obsolescence allowance if he replaces the machine. He is not able to make any claim if the machine is not replaced, or if it is not replaced with a machine which the authorities hold to be sufficiently similar. It is different in some other countries, notably Australia, where an allowance is made when the life of the machine comes to an end or the manufacturer gets rid of it, whether he replaces it or not. That is one of the changes which I should like to see introduced in our own Income Tax laws. I realise that it is not very hopeful in this year, of all particular years, to bring forward a proposal of this kind, but there are some of us who represent industrial constituencies who do attach a good deal of importance to it; and even if the Chancellor of the Exchequer says that it is not possible to do anything this year, I hope that he will tell us that he is bearing this matter in mind, because many of us feel that it is vital that some change should be made in our system of depreciation allowances in order to facilitate the re-equipment of British industry.

7.12 p.m.

Mr. H. G. WILLIAMS: I am very glad the hon. Member is again raising this issue. He has done so on several previous occasions and I have supported him. I think that in principle he is thoroughly right. It is true that if you argue the depreciation question with those whose business it is to assess Income Tax, they say that, after all, you get all the depreciation to which you are entitled, and that later you get what you may not have got before in the obsolescence allowance. That does not alter the fact that among the industrial community you find an abiding sense of grievance on this subject. This is a direction in which we can stimulate improvements in industry. If we can overhaul the general system of depreciation I am certain that we shall raise the standard of efficiency and production of British industry. The more you encourage people to change plant when that plant can be replaced by improved plant, the better for our prosperity and employment. Incidentally, there are still some people who think that machinery causes unemployment. The, manufacture of machinery is far and away the largest industry in this country, and if it were not for the use of machinery there would be hardly any coal mining needed in this country. But I will not pursue that point or you, Captain Bonnie, will say that I am straying from the fundamental and immediate purpose of this new Clause.
The allowance of one-tenth was granted in 1932 at the time Income Tax was raised and now we are creeping back to that level, and, as it was recognised by, all that one-tenth was a help, but was' not adequate, the case for an improvement of the one-tenth is stronger now than on previous occasions when the hon. Member raised this important issue. Provided that you could have appropriate provisions against fraud, it would be a good thing if everybody were allowed to arrange his own depreciation. You could only write off 100 per cent. The only difficulty is that there might be fraud. I see no reason, providing you could have precaution against fraud, why people should not be free to claim for reduction of Income Tax every penny-piece which in their own books they write off their plant. I see no reason why a firm should have two depreciation accounts, one which they


think desirable on economic grounds and the other which they are forced to make. There is room for reform. I am not, very hopeful of the chances of this Clause, because the Chancellor has not very much to give away, but I hope the hon. Member's advocacy will ultimately bear fruit, and that the Chancellor will give us some comfort to-night as to the prospect for the future.

7.16 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I find myself in a difficulty because, in introducing this well-worn Clause, the hon. Member said it was to be regarded only as a gesture, and that what he wanted was a complete overhaul of the system of allowances for wear and tear. My hon. Friend the Member for South Croydon (Mr. H. G. Williams) also has not confined his advocacy to the particular Measure before the Committee. I see, therefore, that any argument that I may bring forward against the acceptance of the Clause will be met with the answer that that is not relevant, because he is not merely pressing for the Clause, but for something much more wide and general. Nevertheless I must address myself, in the circumstances, to the Clause that is before us. Not only was the concession of an increase of the wear and tear allowance given at a time when the Income Tax was 5s., but it was expressly described at the time by the then Chancellor of the Exchequer as a form of compensation to industry for raising the tax from 4s. 6d. to 5s. Subsequently the Income Tax was reduced to 4s. 6d., and the reason for the concession disappeared. Nevertheless, the increase in the wear and tear allowance remains. Now that compensation is made the basis of fresh demands. On that ground, therefore, it will be seen that the original concession was given for a particular purpose and that purpose no longer exists.
To come to another point. Suppose we doubled this allowance of 10 per cent., the effect would be only to shorten the time between the purchase of the machine and the time when the obsolescence allowance comes into play, because under the present system there is an annual amount allowed for the depreciation of the machinery on account of wear and tear and, if that allowance for wear and tear has not been complete, when the machine

is obsolete and replaced by another machine, an allowance for obsolescence can be claimed. Although the hon. Member said that what he wanted was to provide that the obsolescence provision should apply not only in cases where the machine was replaced but in other cases where the machine was not replaced, his Clause would not deal with that point. If the Clause were accepted, it would cost £1,750,000 this year and more in a full year, and my Budget would be at once undone. In the circumstances I could not ask the Committee to accept it. I am always averse from committing myself to promises when I am not quite certain I shall be able to carry them out. I, therefore, refrain from giving any such undertaking as has been asked of me, but I am bound to say to my hon. Friend the Member for South Croydon, who says this is a grievance to industrialists, that that does not seem to be a conclusive argument because I hardly know any form of tax which is not regarded by those who pay it as a standing grievance.

Question, "That the Clause be read a Second time," put, and negatived.

New CLAUSE.—(Exemption from death duties of certain property if sold to Friends of National Libraries.)

Section forty-four of the Finance Act, 1921, and the proviso to Sub-section (2) of Section forty of the Finance Act, 1930 (which provide that death duties shall not become chargeable in respect of certain property on the sale thereof to the National Gallery, British Museum, or certain other institutions and persons therein mentioned), shall have effect as if the references to such a sale included a reference to a sale after the passing of this Act to the society known as "the Friends of the National Libraries."—[Mr. G. Kerr.]

7.21 p.m.

Mr. GRAHAM KERR: I beg to move, "That the Clause be read a Second time."
This Clause is not one which will arouse any opposition. It is unnecessary to say anything to stress the importance of national and other libraries. They constitute a large part of the working equipment of civilisation. They constitute also a refuge to which one can flee from the ordinary dull and sometimes sordid surroundings of work-a-day life into a world of beauty and interest, where one can commune with the great figures of past history or with the charming characters of fiction. Those of us who are interested


in that history of a larger growth called evolution recognise in books and libraries something else, for we see in them receptacles in which our civilisation is safely stored. The world is littered with fragmentary remains of civilisations of the past which have vanished away, many probably entirely gone but some of them still recognisable by fragmentary remains. Their fate will not be the fate of the civilisation of to-day because that civilisation is preserved in books and libraries. Even if the civilised races of mankind were entirely exterminated, their civilisations itself would remain perpetuated in books. I think the whole Committee will feel then that libraries are things that are in every way to be encouraged. As the Committee is aware, objects of interest, literary or scientific or artistic or historical or national, are exempted by the Finance Acts of 1921 and 1930 from death duties in so far as such objects are sold to national museums or certain public bodies. Amongst the public bodies granted this exemption by the Finance Acts of 1921 and 1930 is a body called the National Arts Fund, the splendid work of which is known to most Members of the Committee as having made possible many important additions to our national art collections. These exemptions were rendered in 1931 more precise than they had been in the earlier Act.
In. 1931, however, there did not exist this particular body, the Friends of National Libraries, but it had been felt for some years at that time how exceedingly desirable it was that in our country we should have a body which would act upon parallel lines with the Art Collections Fund but which would be interested not in objects of art but in books, manuscripts and objects which would naturally go to libraries. In 1931, just after the second of the Finance Acts that I have mentioned was passed, there was an important letter in the "Times" over the signatures of various distinguished persons, who pointed out the need of this body, and the need was stressed in a leader in that journal. The outcome was the foundation of this society called the "Friends of National Libraries." It has been the means of providing various important additions to our national libraries, and this expression "National Libraries" does not mean merely the British Museum Library. It means the

national libraries of England, Scotland and Wales. It means the libraries of our great universities and municipalities and various others. All of them are recognised as receptacles into which the flow of important books and manuscripts should be encouraged. In the very first year of the society it was the means of making some extraordinarily important additions to our national libraries, including a very wonderful collection of manuscripts relating to the poet Goldsmith and some extraordinarily interesting criticisms of the Elizabethan poets by a very expert contemporary critic. Later there passed to the British Museum the final instalment of what is recognised by all scholars as the most wonderful collection of private family letters and documents illustrating the life of our country in the 15th century. There is a long series of such acquisitions which have been made either directly through the Friends of National Libraries or indirectly through their good offices. I am sure the Committee will agree as to the importance of this fund. There will be no dissent in any quarter, from this larger party with its rather diverse opinions right across to that party which is characterised above all by its homogeneity and its singular unity. With that harmony, I hope the Chancellor of the Exchequer will feel justified in yielding to the desire, which I am sure he feels, to accept the Clause which I beg to move.

7.30 p. m.

Mr. CHAMBERLAIN: The Committee will agree that my hon. Friend has given us an impressive account of the work of the Friends of National Libraries. I have made inquiries and find that they are doing really the same sort of thing for libraries as the National Art Collections Fund are doing for picture galleries. In the circumstances, I propose to ask the Committee to accept the Clause, and I do it the more readily, as I am informed that it will cost me practically nothing.

Clause added to the Bill.

NEW CLAUSE.—(Exemption from trailer duty of agricultural vehicles drawing farming implements.)

(1) For the purpose of sub-paragraph (4) of paragraph 5 of the Second Schedule to the Finance Act, 1920 (which, as amended by the Seventh Schedule to the Finance Act, 1933, imposes an additional


duty on goods vehicles if used for drawing a trailer), a farming implement not constructed or adapted for the conveyance of goods or burden of any description shall not be deemed to be a trailer when drawn by a goods vehicle chargeable with duty under sub-paragraph (a) of that paragraph (which as so amended relates to vehicles used for purposes of agriculture).

(2) This Section shall come into operation on the first day of January, nineteen hundred and thirty-seven.—[Sir J. Lamb.]

Brought up, and read the First time.

7.31 p.m.

Sir J. LAMB: I beg to move, "That the Clause be read a Second time."
I hope that the procedure on the last Clause is an augury of what may happen with regard to this Clause. I do not intend to detain the Committee, as hon. Members who have read the Clause will see that it is almost self-explanatory, that there is a long list of Clauses to be dealt with, and that the Chancellor has told us that he wishes to finish the Committee stage of the Bill to-night, most of us hope at a reasonable hour. However, if I do not say something about the Clause probably I may not be as successful as my hon. Friend who moved the previous Clause. At the present time farming implements which are drawn behind a motor vehicle are taxed as trailers. In the mind of most people a trailer means another vehicle which is being towed behind a motor driven vehicle and is, generally speaking, looked upon as being required for the conveyance of goods. When a trailer contains goods the reason for the extra tax is, that it is increasing the earning capacity of the motor vehicle to which it is attached. That is not the case in the matter of the farming implements referred to in this Clause. These are really implements of the agricultural industry which are conveyed from one field to another or for short distances and are attached to mechanically propelled vehicles. It was not the intention of the Act when it was passed to put a tax upon such trailers, but that has been the effect of the Act as it stands at present. I hope that the Chancellor of the Exchequer will see his way to accept the new Clause, because it will remove an anomaly and something which was not intended in the first place.

7.34 p.m.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): I would like

to thank my hon. Friend the Member for Stone (Sir J. Lamb) for drawing our attention to what is happening as regards the charging of trailer duty for these vehicles. As my hon. Friend has said, the purpose of the new Clause is to relieve farmers from the payment of duty in respect of farm vehicles used for drawing farming implements, particularly harrows and things of that kind. The loss to the Revenue, if we accept the new Clause will, I am informed, be negligible, and also, I believe that very few of these vehicles go along the public highway. In these circumstances, I ask the Committee to accept the new Clause.

Clause added to the Bill.

NEW CLAUSE.—(Exemption from Estate Duty of sums allowed in maintenance claims.)

In determining the principal value of an agricultural property for the purpose of Estate Duty deduction shall he made for any sums which during the 10 years preceding the death of the owner have been allowed to him for repayment of Income Tax in respect of the maintenance of the property as defined in the first schedule to the Income Tax Act, 1918.—[Mr. W. Roberts.]

Brought up, and read the First time.

7.35 p.m.

Mr. W. ROBERTS: I beg to move, "That the Clause be read a Second time."
This new Clause is not intended to raise the large question of Death Duties as a whole, but is only intended to deal with a comparatively small issue. The effect of the Clause would not be to relieve landowners of taxation but rather to encourage them to spend money upon the maintenance of their agricultural property and thereby to benefit the occupier of land. The Committee will be aware that the valuation of land for the purposes of Estate Duty or Death Duty is based upon a value arrived at under Schedule A of the Income Tax Acts. Under the Income Tax Acts the rule, as originally laid down, provides that the value for Death Duty shall not be more than 25 times the Schedule A assessment and that a deduction of 5 per cent. may be made for maintenance. Under the Income Tax rules there is a much larger allowance made for maintenance. It is one-eighth, and, in addition, there is a


further rule which provides that if a landowner spends more than the one-eighth, he may average the additional expenditure over five years and may make a claim in respect of it, provided that the expenditure has been for maintenance as defined in the rules governing Schedule A. For the purposes of this rule the term "maintenance" includes the replacement of farmhouses, farm buildings, cottages, fences, and other works where the replacement is necessary to maintain the existing rent.
Therefore, I wish to make it clear that, in this new Clause, I am not asking for any relaxation of taxation upon any new equipment, but only upon such expenditure on maintenance as is necessary to maintain the estate at the value at which it stands at present. The purpose of the Clause is to allow the cost of such maintenance to be deducted from the value of the property in the assessment for the purposes of Death Duty. The precise value of such allowances will be known because they will have formed the subject of a claim for the repayment of Income Tax annually. They will be precise amounts which it will be possible accurately to state. I hope that I have made the object of the new Clause clear to the Committee.
From the general point of view—and I am sure that this will meet with the approval of the Committee in general—it is of great importance, especially at the present time, that the equipment of agricultural land should not be allowed to fall into further disrepair. An immense amount of work needs to be done if employment on the land is to be maintained. The Clause would prove of great value to the workers and the farmers and to the community as a whole in maintaining food production in the country. It may be suggested that it would benefit primarily the landowner. I do not think so, because the attitude of too many landowners to-day is that, as agriculture is not profitable, it does not pay them to do anything to their farms. They do not get a return on their capital equal to that which is obtainable in industry. Because that general feeling is held by many landowners, by too many, the equipment of these farms is not kept up-to-date. An additional reason is that every landowner feels that if he is to pass on his estate intact in the face of heavy Death Duties he must

provide investments out of which the Death Duties can be paid, and that there shall not be recourse to the selling of part of the land. The result is the derelict condition in which far too many agricultural districts find themselves to-day.
If the tenant farmer—and I have been one before now—can go to his landlord and ask him to do certain, works of repair, and can point out that not only will he get allowances in respect of Income Tax, but that when the time comes to pass on the land, it will be possible to obtain an allowance with regard to Estate Duty on such expenditure, I think that the tenant farmer will stand a very much better chance of getting that work done. What happens at the present time is that too often the landowner will say that he cannot afford to do the work. His tenant will therefore leave him, and he will have to find another tenant at a lower rent. In this way the value of land is reduced, and the Chancellor of the Exchequer himself loses when the land is valued for Death Duties, as the value for Death Duty is thereby reduced. If the value of the land is maintained through necessary work being carried out, the value of the Death Duty will be maintained.
If the Clause were accepted it would be to the benefit of the agricultural community as a whole. Anybody connected with agriculture knows of the enormous amount of work that requires to be done. I do not think that any industry other than that of agriculture would be ready to carry on with buildings and equipment which might be 100 or 200 years old, or in the dilapidated condition in which so many farmhouses and farm buildings are at the present day. We hear a good deal about bringing the Defence Forces up to date and it is suggested that it is very wrong not to equip the armed forces of this country with the latest equipment. I suggest also that it is very foolish to expect agriculture, if a crisis should arise, to produce the additional foodstuffs which would be required, if the equipment is entirely out of date. The purpose of the new Clause is to give an additional encouragement to landowners to spend money in maintaining their farms with modern equipment, and I hope that for that reason the Chancellor of the Exchequer will give it his favourable consideration.

7.45 p.m.

Mr. BELLENGER: I hope the Chan- cellor of the Exchequer will not accede to the request that has been made by the hon. Member. In all his arguments there is one weak spot. He suggested that the landowner does not keep his farm buildings in full and good repair because he is not able to do so. Why? I presume it is because he is not able to get sufficient rent. Why is he not able to get sufficient rent? We have heard from the benches opposite that the reason is because the farmer is not able to get an adequate price for the commodity he produces. If the landowner is going to get the full rent on which Schedule A assessment will be based it will be necessary for the Minister of Agriculture in the first place to do something for the farmer. Schedule A assessments are revised periodically. I do not now whether it is the case in the country as it is in the towns, where they are revised every five years. These assessments are based on the rental that is likely to be produced from the land. Therefore, if the rents are low, whether due to the dilapidated state of the farm buildings or not, presumably the Schedule A assessment will also be low. If the Schedule A assessment bears any real relation to the rental value of the land, then I presume that in the case of the death of the owner of the land the Schedule A assessment being low and being multiplied by this factor, whatever it is, the actual value on which the Estate Duty will be based will also be low. Therefore, it will not be necessary for the additional allowance suggested by the hon. Member to be made.

7.47 p.m.

Mr. CHAMBERLAIN: This Clause is another variant of the devices put forward time after time to give further relief to the owners of agricultural land. Whatever the merits of a general argument of that kind may be, I cannot this year, when increased taxation is being imposed, possibly consider any Amendment of the kind. I would remind the Committee that agricultural land has already received relief from Estate Duties to the amount of £600,000 a year. Apart from the general consideration, this particular form of Clause is open to serious objection. There is a point of principle involved, inasmuch as the relief here is

dependent on the amount of money that the owner spends in maintaining the value of his property. If I were to accept this Clause I do not see why it should be confined to agriculture. The hon. Member in moving the Clause stated that one of its purposes was to provide that the equipment of land, buildings and so forth should not be allowed to fall into decay. May I point out that in the case where the owner does not spend any money in the maintenance of his property, because he cannot afford to do so, this Clause would give no relief? The amount of relief that would be given by the Clause would vary according to the value of the land, and the less need there was for relief the more would be the relief given by the Clause. That being so, the hon. Member will see that the particular form of relief that he desires to give to agriculture is not one that I could accept.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Amendment of 1 Geo. V., c. 8, s. 43, 18 and 19, Geo. V., c. 10, s. 6, and 19 and 20 Geo. V., c. 17, s. 5, in respect of mead.)

Section forty-three of the Finance Act, 1910, section six of the Finance Act, 1927, and section five of the Finance Act, 1928, shall not apply to the manufacture or sale of mead made from honey produced in Great Britain or to such mead sent out from the premises of a maker of sweets for sale.—[Mr. Rickards.]

Brought up, and read the First time.

7.49 p.m.

Mr. RICKARDS: I beg to move, "That the Clause be read a Second time."
In moving the Clause in the absence of my hon. Friend the Member for Thirsk and Malton (Mr. Turton) I would ask the Committee not to think that because this is a small matter it is not important. When an industry is doing well, a small, good industry deserves the same sympathy and support as any large one. I should like to remind the House that in dealing with this question we are dealing with possibly the second oldest product in the country. I believe I am correct in saying that centuries before the first yarn from wool was woven in this country liquor mead was produced here. For thousands of years, long before we heard of beer or whisky, this was our standard drink. In those times they were wise people,


who realised how good mead was. One cannot imagine on the field of Troy Achilles coming back, after killing Hector, and having a mild or bitter. Nor could I, much as I appreciate the Scots, imagine them on Mount Olympus having whisky and soda all round. It was not clone. Therefore, this question of mead is a most venerable one.
I should like to appeal to the Chancellor of the Exchequer on a matter of utility. There are very few questions in this House on which we are all agreed, but there is one, and that is, no matter in what part of the House we situ we all like to see this little island of ours as beautiful as possible. We are also agreed that nothing makes it more beautiful than our flowers and gardens. There is nothing more pleasing to us, whether in castle, or house, or little cottage, or public park, than to note the interest that is taken and the improvements that have been effected in our gardens. Nothing helps the gardener more than the busy bee. I would especially appeal to the Chancellor of the Exchequer, because I know how, when he walks in St. James's Park, he enjoys looking at the flowers. I do not think that the concession which I ask him to make would cost much, and I would ask him to meet us on this question. It is a very small question, but in some counties, including my own county of York, it is honestly a small, a growing and a very nice industry.

7.53 p.m.

Mr. DALTON: May I appeal to the Chancellor of the Exchequer, after the

attractive speech to which we have just listened, to make yet one more concession, negligible in point of monetary sacrifice, to give a stimulus to bee-keeping in connection with the various forms of agricultural production? I confess to the Committee that I have only drunk mead once, and that was in a foreign country. It is rather hard to come by in this island, but I hope that by the acceptance of this Clause, if the Chancellor of the Exchequer will accept it, we may be able to drink mead in this country.

7.54 p.m.

Mr. CHAMBERLAIN: I understand that mead, an alcoholic drink which is derived from the fermentation of honey, was introduced in mediaeval times into this country, and has not been heard much of since. It might be that if I had access to supplies of mead I should take a greater pleasure in the flowers of St. James's Park. I would put it to my hon. Friend that before he seriously suggests that the bee-keeping industry is depressed by reason of the licence duty on the sale of mead, he had better produce the mead, so that I may have a somewhat closer acquaintance with it than I have to-day. If this Clause were a serious proposition I should require further proof of the production of mead.

Question put, "That the Clause be added to the Bill."

The Committee divided: Ayes, 119; Noes, 180.

Division No. 243.]
AYES.
[7.58 p.m.


Acland, Rt. Hon. Sir F. Dyke
Cocks, F. S.
Henderson, J. (Ardwick)


Adams, D. (Consett)
Compton, J.
Henderson, T. (Tradeston)


Adams, D. M. (Poplar, S.)
Cove, W. G.
Hills, A. (Pontefract)


Adamson, W. M.
Daggar, G.
Holdsworth, H.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Davies, D. L. (Pontypridd)
Holland, A.


Anderson, F. (Whitehaven)
Davies, R. J. (Westhoughton)
Jagger, J.


Attlee, Rt. Hon. C. R.
Davies, S. O. (Merthyr)
Jenkins, A. (Pontypool)


Banfield, J. W.
Dobble, W.
Jenkins, Sir W. (Neath)


Barnes, A. J.
Dunn, E. (Rother Valley)
Jones, A. C. (Shipley)


Batey, J.
Ede, J. C.
Jones, H. Haydn (Merioneth)


Bellenger, F.
Edwards, Sir C. (Bedwellty)
Kelly, W. T.


Benson, G.
Evans, D. O. (Cardigan)
Kennedy, Rt. Hon. T


Bevan, A.
Fletcher, Lt.-Comdr. R. T. H.
Kirkwood, D.


Broad, F. A.
Foot, D. M.
Lathan, G.


Bromfield, W.
Frankel, D.
Lawson, J. J.


Brooke, W.
Gardner, B. W.
Leach, W.


Brown, Rt. Hon. J. (S. Ayrshire)
Gibbins, J.
Lee, F.


Buchanan, G.
Graham, D. M. (Hamilton)
Leonard, W.


Burke, W. A.
Greenwood, Rt. Hon. A.
Leslie, J. R.


Cape, T.
Grenfell, D. R.
Logan, D. G.


Cassells, T.
Griffiths, F. Kingsley (M'ddl'sbro, W.)
Lunn, W.


Charleton, H. C.
Griffiths, G. A. (Hemsworth)
Macdonald, G. (Ince)


Chater, D.
Hall, G. H. (Aberdare)
McEntee, V. La T.


Cluse, W. S.
Hall, J. H. (Whitechapel)
McGhee, H. G.




MacLaren, A.
Price, M. P.
Taylor, R. J. (Morpeth)


Maclean, N.
Richards, R. (Wrexham)
Thurtle, E.


MacMillan, M. (Western Isles)
Roberts, Rt. Hon. F. O. (W. Brom.)
Tinker, J. J.


Marklew, E.
Robinson, W. A. (St. Helens)
Vlant, S. P.


Mathers, G.
Rothschild, J. A. de
Walkden, A. G.


Messer, F.
Salter, Dr. A.
Walker. J.


Montague, F.
Seely, Sir H. M.
Watkins, F. C.


Morrison, Rt. Hn. H. (Ha'kn'y, S.)
Sexton, T. M.
Watson, W. McL.


Morrison, R. C. (Tottenham, N.)
Short, A.
Westwood, J.


Muff, G.
Sinclair, Rt. Hon. Sir A. (C'thn's)
White, H. Graham


Naylor, T. E.
Smith, Ben (Rotherhithe)
Whiteley, W.


Oliver, G. H.
Smith, E. (Stoke)
Wilkinson, Ellen


Paling, W.
Smith, Rt. Hon. H. B. Lees- (K'ly)
Williams, E. J. (Ogmore)


Parker, J.
Smith, T. (Normanton)
Williams, T. (Don Valley)


Parkinson, J. A.
Stephen, C.



Pethick-Lawrence, F. W.
Stewart, W. J. (H'ght'n-le-Sp'ng)
TELLERS FOR THE AYES.—


Potts, J.
Strauss, G. R. (Lambeth, N.)
Mr. Rickards and Mr. Dalton.




NOES.


Adams, S. V. T. (Leeds, W.)
Ganzonl, Sir J.
Morrison, W. S. (Cirencester)


Agnew, Lieut. Comdr. P. G.
Gibson, C. G.
Neven-Spence. Maj. B. H. H.


Albery, I. J.
Gledhill, G.
Nicolson, Hon. H. G.


Anderson, Sir A. Garrett (C. of Ldn.)
Graham Captain A. C. (Wirral)
O'Connor, Sir Terence J.


Anstruther-Gray, W. J.
Grattan-Doyle, Sir N.
Ormsby-Gore, Rt. Hon. W. G.


Aske, Sir R. W.
Gridley, Sir A. B.
Orr-Ewlng, I. L.


Balfour, G. (Hampstead)
Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)
Palmer, G. E. H.


Balfour, Capt. H. H. (Isle of Thanet)
Gunston, Capt. D. W.
Peat, C. U.


Balniel, Lord
Guy, J. C. M.
Perkins, W. R. D.


Barclay-Harvey, C. M.
Hanbury, Sir C.
Petherick. M.


Beit, Sir A. L.
Hannah, I. C.
Pickthorn, K. W. M.


Bernays, R. H.
Hannon, Sir P. J. H.
Plugge, L. F


Birchall, Sir J. D.
Harbord, A.
Pownall, Sir Assheton


Blaker, Sir R.
Haslam, Sir J. (Bolton)
Radford, E. A.


Blindell, Sir J.
Heilgers, Captain F. F. A.
Raikes, H. V. A. M.


Boulton, W. W.
Hepworth, J.
Rathbone, J. R. (Bodmln)


Bower, Comdr. R. T.
Herbert, Major J. A. (Monmouth)
Rayner, Major R. H.


Boyce, H. Leslie
Herbert, Captain S. (Abbey)
Reed, A. C. (Exeter)


Braithwalte, Major A. N.
Hills, Major Rt. Hon. J. W. (Ripon)
Reid, Sir D. D. (Down)


Brown, Col. D. C. (Hexham)
Hope, Captain Hon. A. O. J.
Reid, W. Allan (Derby)


Bull, B. B.
Hopkinson, A.
Remer, J. R.


Bullock, Capt. M.
Hore-Belisha, Rt. Hon. L.
Ropner, Colonel L.


Burghley, Lord
Horsbrugh, Florence
Ross Taylor, W. (Woodbridge)


Butler, R. A.
Hudson, Capt. A. U. M. (Hack., N.)
Ruggles-Brise, Colonel Sir E. A.


Campbell, Sir E. T.
Hudson, R. S. (Southport)
Russell, A. West (Tynemouth)


Cary, R. A.
Hume, Sir G. H.
Russell, S. H. M. (Darwen)


Cazalet, Capt. V. A. (Chippenham)
Hunter, T.
Salt, E. W.


Chamberlain, Rt. Hn. N. (Edgb't'n)
James, Wing-Commander A. W.
Selley, H. R.


Channon, H.
Jones, Sir G. W. H. (S'k N'Wgt'n)
Shakespeare, G. H.


Chorlton, A. E. L.
Jones, L. (Swansea, W.)
Shaw, Major P. S. (Wavertree)


Colfox, Major W. P.
Keeling, E. H.
Shaw, Captain W. T. (Forfar)


Colville, Lt.-Col. D. J
Kerr, H. W. (Oldham)
Shute, Colonel Sir J. J.


Cooke, J. D. (Hammersmith, S.)
Kerr, J. Graham (Scottish Univs.)
Smith, Sir R. W. (Aberdeen)


Courthope, Col. Sir G. L.
Kirkpatrick, W. M.
Somervell, Sir D. B. (Crewe)


Craddock, Sir R. H.
Lamb, Sir J. Q.
Somerville, D. G. (Willesden, E.)


Cranborne, Viscount
Law, Sir A. J. (High Peak)
Southby, Comdr. A. R. J.


Critchley, A.
Leech, Dr. J. W.
Spears, Brig.-Gen. E. L.


Crookshank, Capt. H. F. C.
Lewis, O.
Spens, W. P.


Croom-Johnson, R. P.
Lindsay, K. M.
Stanley. Rt. Hon. Lord (Fylde)


Crowder, J. F. E.
Llewellin, Lieut.-Col. J. J.
Stanley, Rt. Hon. Oliver (W'm'I'd)


Culverwell, C. T.
Locker-Lampson, Comdr. O. S.
Stourton, Major Hon. J. J.


Davles, MaJor G. F. (Yeovil)
Lovat-Fraser, J. A.
Strauss. E. A. (Southwark, N.)


Dawson, Sir P.
Lumley, Capt. L. R.
Strauss, H. G. (Norwich)


Denman, Hon. R. D.
Mabane, W. (Huddersfield)
Strickland, Captain W. F.


Denville, Alfred
MacDonald, Rt. Hn. J. R. (Scot. U.)
Stuart, Hon. J. (Moray and Nairn)


Dorman-Smith, Major R. H.
MacDonald, Rt. Hon. M. (Ross)
Tasker, Sir R. I.


Dower, Capt. A. V. G.
McKie, J. H.
Taylor, Vice-Adm. E. A. (Padd., S.)


Duckworth, G. A. V. (Salop)
Magnay, T.
Touche, G. C.


Duckworth, W. R. (Moss Side)
Maitland, A.
Tufnell, Lieut.-Com. R, L.


Dugdale, Major T. L.
Makins, Brig.-Gen. E.
Wakefield, W. W.


Duggan, H. J.
Manningham-Buller, Sir M.
Wallace, Captain Euan


Duncan, J. A. L.
Margesson, Capt. Rt. Hon H. D. R,
Ward, Lieut.-Col. Sir A. L. (Hull)


Eastwood, J. F.
Markham, S. F.
Ward, Irene (Wallsend)


Eden, Rt. Hon. A.
Mayhew, Lt.-Col. J.
Waterhouse, Captain C.


Edmondson, Major Sir J.
Mellor, Sir J. S. P. (Tamworth)
Wedderburn, H. J. S.


Elliston, G. S.
Mills, Major J. D. (New Forest)
Wells, S. R.


Emrys-Evans, P. V.
Mitchell, H. (Brentford and Chiswick)
Williams, H. G. (Croydon, S.)


Erskine Hill, A. G.
Mitchell, Sir W. Lane (Streatham)
Wise, A. R.


Everard, W. L.
Moreing, A. C.



Findlay, Sir E.
Morgan, R. H.
TELLERS FOR THE NOES.—


Fleming, E. L.
Morris-Jones, Dr. J. H.
Sir George Penny and Mr. Cross.


Question put, and agreed to.

NEW CLAUSE.—(Fatal flying accidents in peace time.)

The provisions of section thirty-eight of the Finance Act, 1924, shall apply to the case of any person in the said section referred to dying as the result of a flying accident occurring to such person while flying on duty in peace-time in the same manner as if such accident had occurred on active service against an enemy.—[Mr. Spent.]

Brought up, and read the First time.

8.9 p.m.

Mr. SPENS: I beg to move, "That the Clause be read a Second time."
This is a Clause to extend certain provisions with regard to Death Duties which now apply to fatal accidents in war time to members of the flying corps in the case of fatal accidents in peace time. During the last few months a very intensive training has been started in the Air Force, and officers and men are at the present moment engaged in flying far longer hours and doing exercises which are just as strenuous and as full of risks as any which they perform in war time. Officers and men in the flying corps attached to the Mediterranean Fleet have, in fact, been flying far longer hours and under very difficult circumstances; circumstances which are practically identical to those of war time and active service. As it is they are technically serving in peace time. Under legislation which started at the time of the Boer War and went up to and included 1924, if any member of the Service is killed by accident while on active service the first £5,000 of any property he has which passes to his widow, his children, his father or his mother, bears no Estate Duty, and if the property is larger than that it still bears a modified rate compared with a person's normal estate.
I will not go into the number of persons who have unfortunately been killed in the Air Force during the last few months, but it is all too well known that there have been a number of fatal accidents during the last year. It may be that to some extent these fatal acidents are due to the strain which is being put on officers and men in the Air Force owing to the intensive training which is now going on, and to the strain which has been put upon them in the Mediterranean area in connection with the operations they have had to carry out there. It seems somewhat illogical

that if a married officer or man meets with a fatal accident when flying after there has been a formal declaration of war, or if he is engaged in warlike operations such as dealing with a village on the Indian Frontier or with Arabs in Irak, his widow and the children and family get the benefit of the remission, but if the fatal accident occurs while he is flying in peace time, then no such remission is given. It is quite true that under existing legislation there is a discretion that even in peace time the Treasury may give this remission, if the actual operations on which the person was engaged involve the same risks as those on active service, but, of course, it is difficult to say at any one time that the operations taking place in peace time do involve the same risks as operations on active service.
The new Clause really means that it is a decision of this House that under present circumstances the flying operations on which the Royal Air Force is engaged should be regarded as involving them in risks similar to those on active service. It may be said that it is somewhat invidious to pick out officers and men of the Air Force flying in peace time and not engaged in some other naval or military operations, but my submission is that generally speaking the training which is being done now in the Air Force more nearly approximates to the conditions which obtain in war time than the training of any other branch of the Services. Having regard to what has actually been going on in the Mediterranean and throughout the country at the present moment in the matter of intensive training, I hope the Chancellor of the Exchequer will be able to remove from the mind of some of these married officers and men such anxiety as exists, and that when they go up they will know that if anything happens their families will get the small relief which they would get if an accident happened in war time.
It is impossible to estimate what the remission would cost the Treasury. It must depend on the number of fatal accidents, but the number of married officers and men involved who leave large estates if they happen to meet with a fatal accident at a comparatively young age is not very large. In these circumstances I do not think it would cost the Treasury a very great deal, and it would be some small appreciation by the Committee of


the work which these officers and men are doing for the country.

8.13 p.m.

Wing-Commander JAMES: I feel certain that the new Clause will receive sympathetic support in all parts of the Committee. It will not be regarded as contentious except perhaps by the Treasury. So far as the possible cost is concerned, I am not an accountant, but I imagine that the anticipated yield from Death Duties is based on an actuarial calculation of the lives of old people, and, therefore, anything which may accrue to the Treasury from Estate Duty, so far as these officers and men are concerned, would be a purely fortuitous gain, and not a gain which perhaps the Chancellor of the Exchequer would wish to receive. The purpose of the new Clause is to remove an anomaly. A very great deal of peace-time flying is really as dangerous as, no more and no less than, a great deal of war-time flying. The hon. and learned Member has referred to the North-West Frontier of India. Anybody who has had to fly over the North-West Frontier knows that the terrain is such that flying is extremely dangerous. A very great deal of flying both for training and police work has to be carried out on the North-West Frontier, and I think it is most unfortunate that a Service which we all want to encourage should be placed under this definite disability.
There comes to my mind the question of the Territorial Air Force. I think we should do everything possible to encourage young men who have the necessary leisure to join the Territorial Air Force, but the threat to their families of the present scale of Death Duties is a real deterrent to some young men who would otherwise come forward. The casualties in the peace-time training of the Air Force are not negligible. I looked up the figures a few days ago, and I found that there have been something like 43 deaths from ordinary flying this year. Probably very few of the men left estates that benefited the Treasury, but such a case might arise and I think the anomaly ought to be removed. I sincerely appeal to the Chancellor of the Exchequer and to hon. Members opposite to support this new Clause, which would cost very little and would be common justice.

8.17 p.m.

Mr. CHAMBERLAIN: I think my hon. and gallant Friend who has just spoken has put the case entirely from the point of view of the Service with which he has been connected. I know that the proposed Clause arises out of two particular instances which have already been brought to the attention of the House. Probably some hon. Members will remember that questions have been put to me as to whether the Treasury would not extend the provisions of Section 38 of the Finance Act, 1924, in order to give relief from Death Duties on the estates concerned in those particular cases. My hon. and gallant Friend said that no one would wish to receive money from deaths which had occurred in such circumstances. That is true, but is it really an argument for the new Clause? Does anyone wish to receive money on account of the death of anybody who dies in an accident in any circumstances? My hon. and gallant Friend then said that this is a trifling matter and that the number of such cases would be very small. He was, of course, basing himself on the assumption that the cases would be confined to members of the Air Force, but I think the Committee will see that there are many reasons why it would be quite impossible to make any distinction between the risks which are run by airmen and those which are run, for instance, by men going in submarines. We all have in our minds memories of submarines having been lost, with the death of all the officers and crew. Will anybody say that the peacetime risks in such a case are not just as great as in the Air Force?
One could multiply instances of this nature. Fatal accidents have occurred during military manoeuvres in the use of tanks and even in the use of blank cartridges. I have in mind other cases. I heard a little while ago of a man in charge of a factory making explosives for the Services. He was running risks every day of his life, and as a matter of fact there was a serious accident in that establishment which resulted in loss of life, although fortunately not his own. Once you gave up the test of hostile action or conditions analogous to it which has been maintained by the Treasury ever since the Section was first drafted in 1924, you would be led on from one case to another, and in the end there would be a serious


drain on the Exchequer. For those reasons I am afraid I cannot accept this proposed new Clause.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Exemption of trade unions and trade protection associa tions from duty chargeable under Part II of 48 and 49 Vic., c. 51.)

(1) The stamp duty chargeable under Part II of the Customs and Inland Revenue Act, 1885, shall not be charged in respect of the property of any trade union or trade protection association.
(2) In this Section—

(a) the expression "trade union" has the same meaning as in the Trade Union Act, 1913;
(b) the expression "trade protection association" means any body of persons, Whether corporate or unincorporate, the principal object whereof is the protection or furtherance of the interests of a trade or industry, or of two or more trades or industries, whether generally or in a particular district.
(3) If any question arises under this Section whether a combination, not being a trade union for the time being registered or certified as such under the Trade Union Acts, 1871 to 1927, is or is not a trade union. it shall be referred to the Chief Registrar of Friendly Societies, and his decision shall be final.—[Miss Horsbrugh.]

Brought up, and read the First time.

8.20 p.m.

Miss HORSBRUGH: I beg to move, "That the Clause be read a Second time."
I think I can say, as other hon. Members have said in moving new Clauses, that if this Clause were accepted it would not be very costly to the Exchequer, and I think in the acceptance of it we should do away with an anomaly. In the minds of most hon. Members there is the idea that the funds of trade unions and trade protection associations come within the statutory exemption, but recently in a case before the courts it was found that they were not classed as bodies established for any trade or business, because it was not found that the word "for" could mean the furtherance of any trade. In this proposed new Clause we are asking the same exemption for trade unions and trade protection societies as exists for other bodies established for trade or business. In Sub-section (2) of the Clause, the expression "trade

union" is stated to have the same meaning as in the Trade Union Act, 1913, and the meaning of the expression "trade protection association" is also given. I have been asked whether there could be any difficulty in deciding what is a trade union, and Sub-section (3) deals with that by stating that if there is any doubt reference may be made to than Chief Registrar of Friendly Societies. I hope very much that Members on all sides of the Committee will be in agreement with doing away with what I believe to be an anomaly, the abolition of which would not cost the Exchequer very much.

Mr. W. S. MORRISON: I think the hon. Lady has made out the case for this Clause, and I propose to accept it.

Mr. OLIVER: Would the Financial Secretary to the Treasury be good enough to say how long this anomaly has existed? Has it existed since 1885, or has it arisen as the result of the decision of the court to which the hon. Lady referred?

Mr. MORRISON: In one sense it has existed since 1885, and various bodies have been granted the exemption from time to time. At the present time it still exists with regard to the bodies referred to by my hon. Friend the Member for Dundee (Miss Horsbrugh). It is now proposed to remove it by accepting the Clause.

Clause added to the Bill.

NEW CLAUSE.—(As to deposit of mechanically-propelled vehicle licence during repairs.)

For the purpose of facilitating the repair of any mechanically-propelled vehicle the holder of an excise licence taken out for such a vehicle may at any time deposit the licence with the licensing authority by whom it was issued for a period of not less than one month, during which period such vehicle shall not be used upon a road, and the licensing authority shall credit the holder with one-twelfth part of the annual rate of duty payable in respect of such vehicle for every complete month of the remainder of the period during which the licence is in force and is deposited with the licensing authority.—[Mr. A. Reed.]

Brought up, and read the-First time.

8.24 p.m.

Mr. A. REED: I beg to move, "That the Clause be read a Second time."


I think I could best explain the proposed Clause by giving a definite example of which I have heard. It was of a motor lorry which was charged for tax at £110 at year. The owner wanted to have it thoroughly overhauled and he surrendered his licence on 31st January for a complete month and then took out a new licence on 1st March, obtaining a rebate of £4 11s. If he had surrendered his licence on 30th November and taken out a new licence on 1st January, he would have received £9 rebate. It seems rather strange that according to the time of the year when the repair is made there should be a difference in the rebate. The matter was not so important when the licences were comparatively inexpensive, but with very heavy licence fees it amounts to a good deal.
There is the danger that a man may continue to work a lorry although it is due for overhaul, in order to get into a period in which he will receive the larger rebate. From that point of view it is advisable that he should be in a position to surrender the licence for a complete month at any time of the year and get back one-twelfth of the duty, provided that the vehicle is in the garage and not being used. The only objection I can see to the proposal is the amount of work which would be involved, but, after all, the staff which looks after these licence duties, while they have one or two very busy months during the year, have at other periods of the year time to spare. I think on all grounds it would be better if such rebates could be spread over the year, and I hope the Committee will accept a proposal which would mean a great deal to many of these transport companies.

8.26 p.m.

Captain HUDSON: I do not think the proposed new Clause is as simple as my hon. Friend has represented. The present law is that the owner of a licence, on surrendering his licence, is entitled to be repaid the appropriate amount of duty in respect of each month of the period of the currency of the licence which is unexpired at the date of surrender. Under the existing law, therefore, a licence may be surrendered and a proportionate refund obtained, irrespective of the reason for surrender. As I understand the proposed new Clause, it aims at securing

what might be called a credit to the licensee of a proportion of the duty, provided that his vehicle is under repair. The trouble is that the new Clause would introduce an entirely new principle in dealing with motor vehicle licences, namely the deposit and subsequent restoration of licences, with credits in respect of the periods of deposit.
The first thing I ask the Committee to note is that the new Clause deals with the time during which a vehicle is under repair. It appears to provide that such a credit would only be obtainable while a vehicle was under repair. Therefore, I am afraid that if we accepted it in this form it would be necessary for us to have technical advisers to tell us whether a, vehicle was in fact under repair or not. In practice, however, that would be impossible. You would have to apply what may be called the credit system to anybody who cared to ask for it, on the ground that he was putting his vehicle in for a short period to have repairs done to it. The Committee will recognise the loopholes which would be opened in that way. A licensee would only have to take off a vital portion of the machine or alter the machinery in some way and then claim that the vehicle was under repair.
I ask the Committee not to give a Second Reading to the Clause, first, on the ground of the administrative difficulty which it would create. The proposals would mean keeping an individual account for each licensee and would also involve a much more detailed audit than is necessary at present, because at the end of each year it would be necessary to add up the amounts of the credits which were due. Secondly, it would mean a great deal of extra expenditure. The present expenditure on the collection of motor vehicle duties by local authorities is nearly £600,000 a year and we do not want, if we can avoid it, to add to that expense. I suggest to the Committee that the present system, which has been evolved to enable people who give up their licences to get the appropriate rebate, has worked well. In the last year £1,300,000 was refunded in respect of surrendered licences. To sum up, the administrative difficulties are so great and the advantages to be derived from the proposal seem to be so small that I hope my hon. Friend will not press his Motion.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE.—(Exemption of invalid carriages from duty.)

(1) No duty shall be payable under section thirteen of the Finance Act, 1920 (which relates to duty on licences for mechanically-propelled vehicles), in respect of vehicles including cycles with an attachment for propelling them by mechanical power) which do not exceed five hundredweight in weight unladen and are adapted and used for invalids.

(2) This section shall come into operation on the first day of January, nineteen hundred and thirty-seven.—[Mr. Kirkpatrick.]

Brought up, and read the First time.

8.32 p.m.

Mr. KIRKPATRICK: I beg to move, "That the Clause be read a Second time."
I am confident that Members on all sides of the Committee will welcome and approve of this long overdue and long overlooked concession. The new Clause is clear and self-explanatory. I commend it to the attention of the Financial Secretary and the Committee.

Mr. W. S. MORRISON: This new Clause is one that can be accepted. At present the duty on invalid carriages is only 5s. a year and as there are 1,600 of these carriages, as far as we can tell, the amount of duty which will be lost by accepting the proposal will be some £400 a year. In the circumstances I can advise the Committee to accept the proposal.

Clause added to the Bill.

NEW CLAUSE.—(Rebate on light hydro carbon oils used for other purposes than road vehicles.)

(1) There shall be allowed from the duties payable on light hydrocarbon oils under section two of the Finance Act, 1928, as amended by the Finance Act, 1931, and the Finance (No. 2) Act, 1931, a rebate at the rate of fourpence per gallon on all light hydrocarbon oils which are shown to the satisfaction of the Commissioners of Inland Revenue to have been used for any purpose other than a fuel for mechanically-propelled vehicles constructed or adapted for use on roads.

(2) This section shall be deemed to have had effect as from the first day of August, nineteen hundred and thirty-six, and shall have effect notwithstanding the preference granted by the British Hydrocarbon Oils Production Act, 1934, to light hydrocarbon oils manufactured in the United Kingdom

from coal, shale, or peat indigenous to the United Kingdom.—[Major Hills.]

Brought up, and read the First time.

8.33 p.m.

Major HILLS: I beg to move, "That the Clause be read a Second time."
This new Clause asks for a rebate of 4d. per gallon on the duty payable on certain light hydrocarbon oils which are not used as fuel for road vehicles. The cost of the concession would be £500,000 in a full year. The light hydrocarbon oils covered by the proposal are those used.in industry. The first is white spirit. It has a flashpoint of 73 degrees Fahrenheit or over, which means that it does not give off inflammable vapour until it is heated to 73 degrees Fahrenheit. It could, possibly, be used in an internal combustion engine but nobody in his senses would so use it. I mention that point because one of the objections which my hon. and learned Friend the Financial Secretary may take to my proposal is that if this concessoin were granted there would be the fear of evasion and of the lowly-taxed article being used for propelling vehicles on the road. I ask for a rebate of 4d. and since the duty is now 8d. that would leave a net duty of 4d. on white spirit and these industrial oils whereas as the Committee knows the Petrol Duty is 8d. The second class covered by the proposal consists of industrial spirits. These are of various kinds and applied to various uses. They are specially produced. They are not similar to motor spirit and they are easily identifiable but they have a low flash-point. They give inflammable vapour at a heat less than 73 degrees Fahrenheit, and, therefore, they could be used for internal combustion engines.
The third class is turpentine, a different article altogether, a vegetable spirit with a high flash point, and nobody could possibly use it in his motor car. The fourth is aviation spirit. I do not press that. If the Government would give the concession of 4d. a gallon on aviation spirit, it would be equal, as far as the Air Force are concerned, to what the Air Force would gain in buying their petrol rather more cheaply, and the country would gain in lower Estimates for the Air Force. If that concession were granted to civil aviation, it would cost about £50,000, included in the £500,000 that I have, already mentioned. I do not know


whether the Government would like to encourage civil aviation. If they would rather that aviation spirit were excluded altogether, then the £500,000 loss of revenue would be reduced to £450,000. The industries which use this spirit are paint, colour and varnish manufacturers, painters and decorators, dyers and cleaners, boot and floor polish makers, and wallpaper makers. All those use white spirit and turpentine. The india rubber makers, the seed crushers, and the bone users make use of industrial spirit, and those industries among them employ between 400,000 and 500,000 people.
I press this concession on the Government with some confidence. I want, and I am sure they want also, to help industry. This is a tax on industry, and these spirits are taxed for this reason: In 1928, when derating was brought in, my right hon. Friend the Member for Epping (Mr. Churchill) put 4d. a gallon on petrol to pay for derating, but these industrial oils were not distinguished, and fell under the derating duty, and up to now they have paid a duty of 8d. For this reason I think I can make a strong case for industry being freed of a burden that was never really intended for it. Next I plead the analogy of the heavy oils. Last year the Chancellor of the Exchequer distinguished between heavy oils used for the Diesel engine in industry and those used in the Diesel engine on the roads, and now the heavy oil that is used in industry pays 1d. a gallon, whereas the heavy oil that is used in lorries and motor buses pays 8d. a gallon. If you can do it with the heavies, why cannot you do it with the lights? If you help industry by taking 7d. a gallon off the heavy oils, surely you can give me a smaller concession, equally-valuable to industry, by taking 4d. a gallon off the light oils. And let my hon. and learned Friend mark that even if we take this 4d. off, these industrial oils will still pay what I may call their derating 4d. because 4d. will remain as the duty. Fourpence was the sum imposed to pay for derating, and the duty on petrol was only raised to 6d., and then to 8d. in 1931, for quite different purposes.
Lastly, I ask for it because it is a tax on production. In some cases the duty is 100 per cent. of the raw article upon which the tax is imposed. I made the case last year for a bigger concession,

and I will not go now into all the points that I raised last year, because I want to come to the Chancellor's objections, which I think may be the same as they were last year. He said that to take 7d. a gallon off these industrial oils would be a breach of faith, because under the British Hydrocarbon Oils Production Act, 1934, the producers of light hydrocarbon oils were granted for ten years a preference of 4d. a gallon, and he said with some force that they would be penalised if 7d. a gallon were taken off. I do not, as a matter of fact, think they would, because they produce a different article altogether, and they do not produce any of the articles that I have mentioned; but now, even if my Clause were passed, the manufacturers under the British Hydrocarbon Oils Production Act, 1934, would still enjoy that preference of 4d. a gallon. I hope I have fully met that objection.
His second objection was that of evasion, and that I want to deal with quite fully and fairly. Of course, there is a risk of evasion if you take the tax off a spirit that can be used in a motor car. If a man gets a chance of getting spirit with only 4d. a gallon tax instead of 8d., he may be tempted to use it in his motor car. I quite agree that that is so, but take all the spirits that I have mentioned. First of all, it is hardly possible that white spirit should ever be used in an internal combustion engine; I do not think anybody would really use it. Take industrial spirit, where I have got a stronger case to meet. You can differentiate and protect the revenue from evasion by one of two means, either by specification or by use. By specification, I mean that your chemists can invent a formula, and then the Statute can say that only those oils that come within the formula shall come within the lower duty. The standing case of that was that of paraffin in 1928. When my right hon. Friend the Member for Epping introduced his Petrol Tax, it was said that he had taxed the lamp oil of the less well-to-do people of this country. It was thought that it was impossible to differentiate, but those very able gentlemen the Treasury chemists got to work and in one day found a specification that would work perfectly well, and paraffin was excepted. I am certain that those able gentlemen could find a specification that would


cover the industrial oils, but would not cover petrol or motor spirit.
Besides that, you can differentiate by use. The heavy oils used for motor cars or lorries and the heavy oils used in industrial Diesel engines are the same—there is no difference whatever—and I do not think there has been any evasion there. I do not think people have improperly bought the lower duty oil and used it in their lorries and motor omnibuses. You can, therefore, differentiate by use, and it is quite easy in the case of light oils. First, there are very few suppliers and very few people who make these light oils. It is easy to control them and to put them on terms to supply only people who use these oils industrially. You have a much simpler problem to prevent evasion than in the case of heavy oils, and yet there is no difficulty there and there has been no evasion, as far as I know.
The next point that the Chancellor of the Exchequer made was there was not the same case with regard to light oils as with heavy oils, because only 5 per cent. of light oil was used industrially, while 95 per cent. was used on the roads, whereas in the case of heavy oil the proportion was reversed. Therefore, he said, the risk of evasion was greater in the case of light oil because it would spread further and spread over the whole of the 95 per cent. instead of only 5 per cent. I expect that these proportions are changed now, and that more heavy oil is used on the roads than a year ago. There are many manufacturers who are employing Diesel engines in lorries who were not doing it before. Surely, if only a small proportion of light oil is used industrially, it is possible to put your hand on all the suppliers. You know where they are and you have a means of preventing the oil being used improperly which you have not got in the case of heavy oil.
Then there is the question of revenue. I know that it is a bad time to ask for any concession from the Treasury, but it is not right that a tax should fall on the wrong article. If you have to tax persons or things, tax the right person or the right thing. I contend that here you are taxing the wrong persons and doing it in the wrong way. Therefore, although he is a bold man who asks the Treasury to give up even £450,000, I do

with some force ask my hon. and learned Friend whether it is a good thing to keep on a tax which discriminates hardly against industry and not to replace it by some other tax which bears more lightly. I shall be told, as I was told last year by the Chancellor of the Exchequer, that the manufacturers for whom I speak are not doing so badly. I do not deny that, but it is not the practice of the Exchequer to tax an industry because it is doing well. A growing industry ought to be encouraged. I believe that if some concession of this kind is made, the industries affected can go on and do better and employ more people, and that the Treasury will get back in Income Tax next year all the concession which they give.
Lastly, there is no effective drawback. Usually when an article is taxed and it is exported, a drawback of a greater part of the duty is given. The drawback does not apply to any of the products that I have mentioned which have lost their identity. As paint and varnish are such, painted and varnished articles exported do not get any rebate. Therefore, they pay the whole of the duty. Our competitors, France, Belgium, Germany and Holland, get concessions on these industrial oils. They are of varying amounts, but they are all important and large concessions. British manufacturers are handicapped by not having such a concession. This tax is burdensome to British industry, it handicaps them in competition with foreign manufacturers, it is outside the intention of the Act of 1928, and it discriminates against a particular set of industries.

8.52 p.m.

Mr. BURKE: I want to ask the Chancellor to agree to this concession. We have not had very many concessions to Lancashire during my experience in this Parliament, and here is an opportunity for the Government to do something for a number of new industries that are growing up in Lancashire in place of the distressed cotton industry. There are in north-east Lancashire, which has been particularly hard hit, a number of firms connected with the wallpaper industry, and they use a considerable amount of light oil. It has often been said that the Government are anxious to help Lancashire. I notice, by the way, as an indication of how they neglect Lancashire, that, while there is a new directory in the


Library for every other district in the country, the last directory for Lancashire is dated 1924.

Mr. W. S. MORRISON: The hon. Gentleman does not suggest that I am responsible for that?

Mr. BURKE: I merely indicate it as typical of the attitude of the Government generally towards Lancashire. I hope that the Financial Secretary is going to follow on a different line. It is easy to differentiate between light oil used for industrial purposes and light oil used for transport. The Chancellor has already differentiated between the two classes of heavy oil by making the tax 8d. in the case of transport and a penny in the case of industrial oil. If this concession were given to the wallpaper manufacturers, the boot and floor polish manufacturers, and the varnish and paint manufacturers, who are developing in Lancashire a number of small industries that want help, they would be able to meet foreign competition more successfully. In foreign countries the users of light industrial oil either are exempt from taxation or get a considerable drawback. I have seen only this week a number of books of wallpaper patterns from Prance and Switzerland which come here to compete with our own people who are trying to do their best to put Lancashire on its feet again. I hope the Chancellor will be able to grant this concession as an honest gesture to Lancashire.

8.55 p.m.

Mr. GRAHAM WHITE: I wish to say one or two words in support of the new Clause moved by my right hon. and gallant Friend. This is not the first time I have done it. This Clause has been moved by him on more than one occasion in previous years—and I think I may say that it will continue to be moved in future unless the case for moving it again should disappear in the course of this Debate—because there are a large number of manufacturers, employing a considerable number of people, who feel they are under a disability in this matter and that the injustice ought to be removed. My right hon. and gallant Friend pointed out that in its initial stages this tax had something of chance in it, but that what was regarded as a mishap to industry at the moment when the tax was first put on has been continued. If there were any

inescapable administrative reason why light hydrocarbon oils should not be exempted from duty we should have to put up with the position, but, as has been pointed out, there could be no difficulty in devising means to prevent evasions. In other cases concerning oils the users have co-operated with the Customs and the Treasury in drawing up suitable schemes when there were complications—though the complications were not so great perhaps as in the present case—and there the Treasury have seen fit to carry out the declared policy of the Government to help industry as much as possible.
Take the case of a manufacturer of linoleum. He uses linseed oil for one purpose and may use light hydrocarbon oils for another. When the linseed oil duty was imposed difficulties arose for certain manufacturers, but the Government had been careful to set up an impartial body to investigate difficulties arising from the incidence of Customs duties. The matter was immediately taken up by the Import Duties Advisory Committee, and in conjunction with the manufacturers they devised a scheme of drawbacks and the disability was removed and there is now, as far as I know, no complaint. But what is the position of the linoleum manufacturer using light hydrocarbon oil for another purpose? He finds that his foreign competitors are either free from similar taxation or have a substantial drawback, and therefore he comes along to ask why he should not have the same facilities in the conduct of his business here. As the Government are ready to assist manufacturers over the whole range of industry in regard to import duties it seems quite reasonable for the users of this white spirit to ask for this concession. They would willingly co-operate in devising a scheme, and as the suppliers are limited in number that would facilitate the making of the necessary arrangements.
There is, perhaps, another reason why the Government in dealing with this duty ought to make no exception to their general policy of helping industry by removing any difficulties that arise. In the case of some users the white spirit is really a part of the machinery of their business. The dry cleaning business provides an example of this. It is a business which is trying to expand, and in these difficult times the Government


ought to assist it. In the dry cleaning business white spirit is in some cases used more than once, and therefore it is correct to say that in taxing that white spirit we are imposing a tax upon their machinery. It is unnecessary for me to develop the case for this Clause at greater length, because my hon. and gallant Friend has already covered practically the whole of the ground. If I have any nuance of difference with him it is that he said one had to be a bold roan to ask for any financial concession in a year like this. I share his view that it is impossible to compute the actual amount of saving to the Revenue that would accrue if this drawback were granted or this differentiation were made in the taxation. Many industries would undoubtedly employ more people, there would be more Income Tax to pay, and I think it is certain that there would be a saving to the State in respect of unemployment allowances. This continued discrimination against the users of white spirit is contrary to the general policy of the Government, and I join in the appeal that favourable consideration should be given to this Clause.

9.3 p.m.

Mr. MUFF: I should like to be associated with my right hon. and gallant Friend and others in pressing this, shall I call it, all-party Clause upon the Government. If the Chancellor had been in his place—I do not complain of his absence, because we have his very able colleague on the Treasury Bench—I should have reminded him that this is the hundredth anniversary of the year in which his distinguished father was born, and that one of the slogans of the late Joseph Chamberlain was, "No tax upon raw materials." One reason why we press for this new Clause is that these light hydrocarbon oils are the raw materials of the trades which have been enumerated. In the city of Hull, with which I am associated—my colleague the Member for South-West Hull (Mr. Law) is here to support the new Clause—we have a large and growing paint industry, and we need to develop it as much as we can, because as a result of the policy of the Government in other directions Hull is handicapped, and our unemployment figures are sufficiently alarming for the Government to have made the city of Hull into what is call a necessitous area. We do not want to advertise our-

selves as a necessitous area. We have sufficient grit and we have sufficient men to be able to develop this new and growing paint and varnish industry.
Let us take one article alone, and that is turpentine. The hon. and learned Gentleman cannot try to hide behind the barrage of difficulties and obstacles which, he will say, will prevent his remitting the tax, because by no stretch of imagination can it be said that turpentine can be used for running an internal combustion engine. I believe it is a fact that we use in British trade at the present time about 6,000,000 gallons of British turpentine, good spirit, largely in those trades which have been so ably dealt with by the right hon. and gallant Gentleman the Member for Ripon (Major Hills). We come to the Financial Secretary, and we ask him to remember his past. [Interruption.] The hon. Lady the Member for Jarrow (Miss Wilkinson) would suggest that the Financial Secretary to the Treasury has no past, and only women have a past. [An HON. MEMBER,: "Shame!"] If there is anything offensive in that observation, I withdraw it. I should not dream of associating the hon. Lady with anybody who has had a past. I want to get back to the turpentine. I appeal to the Financial Secretary to the Treasury. When I mentioned his past I remembered that he was a kindly disposed gentleman, ready to listen to all reasonable pleas and to endeavour to meet them with reasonable answers.

Mr. GALLACHE.R: Look at the company he is in.

Mr. MUFF: Let us leave the company alone. I believe he is in charge for the time being, and can get up at that Box. During the time that we have been debating this dreary and humdrum Budget in Committee, the Financial Secretary to the Treasury has been able to get up at that Box and to give answers which would not only give pleasure to Members of the Committee, but would enable him to say that he had made some contribution to decreasing unemployment. That is what we are after. He could say that this substance is the raw material of a trade which is rapidly developing even under the handicap of competition from practically every other European nation. Most of those nations, whether it be Switzerland


or Yugoslavia, recognise that this is a raw material which is fundamental in developing industry, and they either give a rebate or they cancel the tax altogether.
Let the hon. and learned Gentleman get up in due course, and let him remember the slogan of his party and the policy enunciated by that distinguished statesman, the late right hon. Member for West Birmingham. Let him say to us that he will make some concession upon turpentine, even if he cannot do it upon petrol, and that its administration by the wise heads of the Treasury presents not one atom of difficulty. I hope that we have softened the heart of the Financial Secretary, that he will give us that answer which turneth away all wrath, and that he will be able to go home to-night with the proper Boy Scout feeling, that he has done one good action this day.

9.11 p.m.

Mr. KEELING: It is evident that we are in for a late sitting to-night. I therefore do not intend to detain the Committee for more than about two minutes, but I want to add a word on this question, about which the Treasury made so much difficulty last year. Several hon. Members mentioned that no difficulty has been found in differentiating between the heavy oil used in industry and transport. There are a number of other similar cases. The petrol used for fishing boats is exempt from import duties, as are materials used for building or refitting ships and molasses that go into yeast factories, and no difficulty has been experienced. The nature of the spirit we are dealing with is quite different from that used for motor transport. It is quite wrong that a duty which was intended to be applied to locomotion should be applied to a raw material used in industry, especially as the burden is so very heavy and there are a number of factories engaged in this industry in the Special Areas. I doubt whether any other raw material is taxed as highly as is this one. It may be difficult for the Financial Secretary to give up his £500,000, but I ask him to say that our cause is just and that the matter will receive consideration next year.

9.13 p.m.

Mr. MARKLEW: I do not intend to take more than my share of responsibility if, as has just been predicted, we are in for a late sitting to-night, but I should be neglecting my duty to a portion of my constituency if I did not add my voice to those of hon. Members who have spoken on this proposed new Clause. My constituency is very largely interested in woollen textiles, and I cannot say that it would benefit to the same extent as that of my hon. Friend the Member for Burnley (Mr. Burke) by the acceptance of this proposal. It happens, while I represent a Yorkshire constituency, that one end of it approaches the borders of Lancashire. The textile, industry which predominates in Lancashire has overflown into that little corner of Yorkshire, which unfortunately shares with the rest of Lancashire, and perhaps in the worst possible degree, in the disaster which has overtaken the cotton textile industry.
Representations have been made to me from that corner of my constituency, that cotton mills, some nine in number, existing in the little townships round about, are now derelict. Most of them are of post-war erection but are standing empty. One of them has been taken for the establishment of a wallpaper factory on a fairly extensive scale. I believe there are possibilities of developing that industry in that neighbourhood—and Heaven knows, the neighbourhood needs such a development very greatly. I am not thinking particularly about the proprietors of the industry, but about those who have spent so many hopeless, helpless years suffering in that corner of my constituency, which is practically derelict. If by any means help can be given to them, however it may benefit the employers, I shall be happy to have contributed in however small a degree to that end. I know the Financial Secretary may tell us that the people who are engaged in manufacturing wallpaper do not need this help, and perhaps, judged by ordinary standards, they do not, but, if there is a possibility of their becoming so prosperous as to be able to develop and extend their business and employ more of the workpeople in whom I am specially interested, I hope he will turn a blind eye on the question of their comparative prosperity, and will not use


that old argument again in justification of a refusal to grant this little concession. I feel sure that, if the matter were left to an open vote of the Committee, without any pressure from the Government, the Clause would be carried, with the result that a little additional ray of hope would be brought into the lives of those who have been suffering so long from trade depression.

9. 17 p.m.

Mr. GRANVILLE GIBSON: I agree with the hon. Member for Colne Valley (Mr. Marklew) that, if this Clause went to a free vote of the Committee, there is little doubt that it would be carried. I have not received any representations on the matter from my constituency, but I should have thought that the Clause would commend itself from the point of view of industrialists throughout the country. Last year the Chancellor of the Exchequer, in opposing this Clause, said that only 5 per cent. of the light hydrocarbon oils imported into this country was used for industrial purposes, and that, therefore, it was only a small matter; but it is an important matter to everyone who uses this spirit in his factory or workshop, and it is important to every employ that he has in his place. I would press upon the Chancellor of the Exchequer the fact that it is not the volume that should count, but the difficulties that have to be faced by these industrialists, even though their number may be small and their factories may only employ a few hands, for they have to face competition while using a high-priced raw material.
Reference has been made to the question of linseed oil. I received this morning an Import Duties Order which stated that in future there were to be drawbacks on exported goods in which linseed oil had been used, and that is a principle which has obtained ever since the Import Duties Advisory Committee was set up. A few weeks ago the Opposition were very vehement when the duty on leather imported into this country was increased. They protested because it was a raw material of an industry. Why do they not show support for this Clause? [HON. MEMBERS: "They have."] If the Chancellor of the Exchequer had listened, as the Financial Secretary has during the last hour, to the protestations and pleadings of hon. Members on this side of the Committee, I am sure he would lend a

sympathetic ear to our plea. It has been said that if this rebate were given it would be very difficult to control, but it seems to me that there would be no more difficulty than there is in controlling the supply of methylated spirit. In my works we have to fill in certificates for methylated spirit, and it is controlled at every point, and there is very little difficulty as regards evasion. The supplies of these hydrocarbon oils are in the hands of a very few firms, and surely the Government could come to some arrangement with them for controlling the avenues and seeing that there was no evasion of duty. This is a matter which requires ventilation once more in the House, and I am one of those Members who feel that the Chancellor would be doing a great service to industry in this country if he gave this Clause favourable consideration.

9.24 p.m.

Mr. KELLY: I am rather surprised at the speech of the hon. Member for Pudsey and Otley (Mr. Gibson). If he had been in the Chamber throughout the Debate, he would know that from these benches strong pleas have been made to the Chancellor of the Exchequer and the Treasury to agree to this proposed new Clause, and such pleas have been submitted to him, not only this year, but during the last seven years. I would ask that the Clause should be accepted, not next year, but this year. I would ask the Treasury to consider the people who have to purchase the products of this industry. The extra cost involved by the duty may be small, but it would mean something to the painting and decorating trades in connection with the great schemes of housing which are now in progress in all parts of the country, and it would affect many other products which go into the homes of the people. For this reason, as well as the reason that it is a burdensome duty and one which irritates those engaged in these industries, I would ask the Chancellor to agree to the Clause and get rid of this duty, at any rate so far as regards the rebate asked for.

9.25 p.m.

Mr. RICHARD LAW: In justice to my constituents I feel that I must add my voice to the unanimous chorus in support of this proposed new Clause. Evidently it seems to the Committee as a whole to be so reasonable that one would hope that


the Chancellor would have no hesitation in accepting it. But at the back of our minds there is an uneasy feeling that he may not be as kindly disposed as we should wish. There are in the main only three lines of argument which can be adduced against the Clause. The first is that the Chancellor of the Exchequer has to get the money from somewhere, but it is fair to suggest to him, as the hon. Member for East Birkenhead (Mr. White) did suggest, that when he gets £500,000 by taxing the raw material of an important industry, by suppressing that industry and restricting employment in it, he may not be making such a good bargain as the figures would seem to indicate.
The second argument is the administrative difficulty. It is difficult to distinguish between these two purposes for the same commodity, but that is a difficulty which has been overcome in many other industries, and there seems to be no adequate reason why it should not be overcome in this case. Those industries which use these hydrocarbon oils as their raw material are, on the whole, in a fairly prosperous condition and can easily sustain the burden of the tax. It so happens that these industries are in the main situated in parts of the country which have been very severely afflicted by the world depression. In Lancashire, for example, and in my own constituency of Hull, these industries fill a very important place. In those parts of the country where these industries are, the Government are not responsible for the depression, and it is not the fault of the Chancellor of the Exchequer or of the Government that the Chancellor of the Exchequer is unable to wave a wand and bring back industries like the cotton industry or Continental shipping, such as we have in Hull.
But surely if the Chancellor of the Exchequer cannot work miracles it is all the more incumbent on him to do nothing which will retard the new industries which are springing up to take the place of the old ones. It is surely the duty of the Government to protect and keep going old industries, and if they cannot do that to give every kind of encouragement to new industries. But they are striking a blow at these new industries. From that point of view there is the strongest possible argument

for accepting the new Clause which my right hon. Friend has moved.

9.28 p.m.

Miss WILKINSON: I have been asked to support this Clause not only by employers in the area which I represent but also by a very strong deputation of workers. Like the previous speaker 1 come from a depressed area—in my case, from the most depressed area. It gets a great deal of sympathy from the Government, but very little practical help. In our case we have a very large paint works, which in one of the most distressed parts of a distressed area does provide a considerable amount of employment on excellent trade union conditions and it is on the best of terms with its workers. We feel that these are people, both employers and workers, who are definitely helping in a very difficult area. The excessive tax on what is their essential raw material is really carried to absurdity. Whatever argument there may be for tariffs it is pretty evident from the Debate to-day that you can carry tariffs to an absurd point, and the high duty on these and linseed oils and raw materials that go into the manufacture of paint and similar commodities, is really carrying things to an absurdity.
I suggest that when many of these paint works are in areas which, if not scheduled as distressed, are in a bad state, it is for the Chancellor of the Exchequer to see whether he could not get this £500,000 from some of the industries which are very much better able to bear it. It does not seem to me a complete argument to say that this particular industry may be a comparatively prosperous industry. Where an industry is providing employment in very difficult areas it should come under this-Clause. If the Government are going to keep this particularly ramshackle system going at all they might try to make the thing work better in those areas where it is working extremely badly. Here is a case in point where it seems that the Chancellor of the Exchequer, without doing any injustice, could remove this vexatious duty and put it on someone who would feel it hardly at all—gramophone records if he likes; they are paying heaven knows what per cent. Here is an essential raw material of a good, well organised industry, and I think that the Chancellor of the Exchequer might, therefore, look into


the matter further and remove or lighten a tax which his own supporters as well as those on this side feel to be vexatious to a degree.

9.33 p.m.

Mr. MATHERS: I know that what I have got to say will be unpopular because of the apparently unanimous feeling in the House that this Clause should be accepted. As it stands, perhaps, there is not as much menace in it as might come out of it later on, perhaps in future years, when, if the concession were granted, the natural corollary of it would be to extend the removal of this tax and to apply it to all that kind of oil for whatever purpose it is used. I represent a constituency which occupies largely the shale-producing area in Scotland, and to pass this Clause and later to give the same advantage to all such oil for whatever purpose it was used, would render that constituency one which, although it is a distressed area at the present time, would be even more distressed.

Mr. GIBSON: I may say that although I for one spoke in favour of this Clause I do not support the total abolition of the duty. It would be prejudicial to our own industry.

Mr. MATHERS: I have simply risen to express my fear of what may come out of giving effect to this Clause, and to point out that in the shale-producing areas which I represent there were previously engaged 12,000 workers. To-day they have been reduced to 3,000 and they are working for three weeks and idle for one. It is possible to carry the industry on simply because of the preference that it has in respect of an eight-penny tax on imported oil of the kind produced in the shale fields. I felt that it was ray duty to utter that word of warning and to indicate that the argument is not entirely on one side, although this proposal is a small thing compared with what might come out of it in the long run.

9.36 p.m.

Mr. W. S. MORRISON: It is very hard indeed to resist a request proposed in such persuasive tones and supported from various parts of the Committee with such force and moderation. At the same time, I fear that the acceptance of the Clause is impossible for two reasons, either of which would be disastrous. The first is one of principle and the second

is that of cost. In introducing it my right hon. and gallant Friend mentioned an estimate of £450,000 as the cost of the concession. That is a sum that represents the balance of the Budget for the year, but even so he has under-estimated. The cost of the concession in a year would be £850,000, which is a very considerable sum, and one with which the Committee would be very ill-advised to part without good reason. It is very difficult to arrive at an exact figure, because at present no distinction is made between industrial petrol and motor spirit, but I am giving the estimate that has been given me by those who are fairly expert in these matters.

Major HILLS: I am very surprised to find that the figures differ so much. May I ask whether my hon. and learned Friend's estimate includes aviation spirit?

Mr. MORRISON: I think I know where my right hon. and gallant Friend got his figure. I saw it put out by one of the associations interested in the matter. Perhaps he has accepted it; but I am told that the figure of £450,000 does not cover all the non-road uses of light oil and misses out marine engines, I do not think the Committee need have any qualms of conscience in refusing to part with this sum, because it has to be borne in mind what the duty is. The question has been obscured sometimes by Debates about the Road Fund, and an impression has got abroad that in some way this is a tax on petrol used for roads and only incidentally for industrial purposes, whereas the truth is that this is a duty imposed upon light hydrocarbon oils for the purpose of obtaining revenue, and it is exactly on the same footing as any other duty imposed for that purpose.
We are asked in this Clause to take this revenue duty and split it up into two sections, one of which is to pay a less tax than the other. There are only two ways in which you can distinguish industrial spirit from motor spirit. My right hon. and gallant Friend the Member for Ripon (Major Hills) indicated that in his view it might be possible to arrive at a distinction by way of specification, and he mentioned the case of kerosene as analogous to this. I am not a chemist, but I am told beyond any doubt that the two things


are by no means analogous and, whereas it is possible to distinguish by a flash point test between kerosene and industrial and motor spirit, it is quite impossible by specification to distinguish between industrial spirit and petrol used for internal combustion engines. Therefore we are driven back upon the second possible form of distinction between these two forms of industrial spirit, and that is by the uses to which they are put. The Committee is familiar with the difficulties that lurk in any such proposal. It is not at all possible, without a very strict and burdensome control which might cost a great deal of money, to distinguish them by this means for the purposes of duty.

Mr. KEELING: Would it be any more difficult to do so than it is at present to distinguish between heavy oil used for transport and industrial purposes?

Mr. MUFF: What is the difficulty with regard to turpentine?

Mr. MORRISON: I will deal with turpentine in a moment. I am asked, Where is the difficulty in framing a distinction on the use to which the spirit is put when you are in fact already making such a distinction with success in the case of the heavy oils? My hon. Friend says, "You are at the moment distinguishing between heavy oil used for road transport and that used for other purposes. Why can you not do the same with equal facility in the case of petrol?" The answer broadly is that it depends entirely on the proportions that are used for the two purposes. My right hon. and gallant Friend rather anticipated this argument. He said that 5 per cent. of the amount of heavy oil was used in our road vehicles. He expected it was more. It is more, but not appreciably so. It is 6 per cent. The fact is that this particular fraction of the heavy oil used for, road vehicles is a very small fraction of the total, whereas in the case of petrol and light hydrocarbon oils the amount used on the roads is 95 per cent., and in industry 5 per cent. The relevance of these figures is this. Let the Committee imagine the problem of control facing the Customs in this matter, and how it is altered by these figures.
You have to control the fact that a number of the people who have to pay would use the less-taxed article for their

own purposes. These are the people who have to be controlled. In the case of the light hydrocarbon oils, they are 05 per cent. of the total users, representing an enormous body of people, whereas in the case of the heavy oils they are only 6 per cent. of the total users of that particular oil, representing a very small and manageable body. Therefore, I suggest to the Committee that it would be very unwise to proceed upon the analogy of the ease with which the heavy oil problem may be handled, when only 6 per cent. of those have to be watched, to the light hydrocarbon oils, when those who would have a temptation to use the less-taxed article for their own purposes amount to 95 per cent. of the total users. That is the relevance of the figures to which the right hon. Gentleman referred earlier in his speech. There is no doubt that the difficulty of cost is one for the Committee, and the question is whether it is worth while facing the difficulties and incurring the cost. These are considerations which are, no doubt, present in the minds of hon. Members. Before you pay anything you want to know what you will get by paying it.
Is it the fact that the industries which are affected by this tax on light hydrocarbon oils require this assistance so much that it is worth while spending this money or losing this revenue and setting up the elaborate and expensive control necessary to administer this exemption? The facts are, I am glad to say, very different. Indeed, the industries chiefly concerned with the use of this particular substance, are, if one can judge by the speeches made at meetings by chairmen of companies, and by the public balance-sheets, on the whole in a very prosperous condition. My right hon. Friend the Member for Ripon in introducing this matter was candid enough to admit the fact. The hon. Gentleman the Member for East Birkenhead (Mr. White), who spoke on this subject, mentioned the case of dyers and cleaners, and it is true that some of those people who use this spirit are not so prosperous. But if one were to talk to anyone engaged in that trade he would find that the cause of the depression has nothing whatever to do with the tax on this spirit, but is due to a variety of other causes, including a certain kind of very keen competition.
I could not follow the hon. Gentleman the Member for East Birkenhead when


he said that they had a particular claim for exemption because they used the same spirit time and time again. Those who use the spirit and consume it in the course of their operations would have a higher claim for exemption than those who use it over and over again. There is nothing to be gleaned from an examination of the industries concerned which would lead the Committee to the view that they were in such a parlous condition that they cannot pay this duty. My right hon. Friend the Chancellor of the Exchequer dealt with this question last year, and in the course of his speech said:
I have had the curiosity to look up and see what has happened to these unfortunate industries that are fighting for their lives … against foreign competition, and it was with a sense of relief that I found that the 10 companies which I took which were engaged as manufacturers of paint.and varnish last year, made £128,800 more profit than they did the year before."—[OFFICIAL REPORT, 24th June, 1935; col. 913, Vol. 303.]
I am able to supplement that now, and to say that for this year those same 10 paint and varnish manufacturing companies showed a further £117,000 in their trade profits this year. My right hon. Friend also mentioned last year the case of the wallpaper manufacturers, and said how in the year, at the end of which he was speaking, the wallpaper manufacturers who were engaged in using this substance increased their profits by 14 per cent. as compared with the year before. I am able to add to the story now, and to say that the same firms this year have added a further 10 per cent. to their profits. That is the light in which this matter ought to be reviewed.

Mr. MUFF: What about turpentine?

Mr. MORRISON: I am obliged to the hon. Member for East Hull (Mr. Muff) for reminding me about turpentine; otherwise I might have forgotten it. Turpentine is in a separate category. Turpentine, although a light hydrocarbon oil for the purposes of the duty, is distinguishable by its vegetable origin from the other substances in this category. At the same time it is for the purposes of the duty a light hydrocarbon oil. The hon. Member says that we ought to differentiate in this matter. The justification for including turpentine within the duty is also the lack of distress among the companies using turpentine, but the

special reason why we think that no exception should be made of turpentine in the matter of this Revenue duty is that to distinguish between one and another of a class on which you are placing a duty tends to make people fly to the substance which is less highly taxed, with resultant damage to the Revenue. Another thing which is very likely to happen is what happened when my right hon. Friend applied the duty to Diesel oil used for road purposes, when Diesel oil was being used on the roads to an unnatural degree and at the same time damaging the Revenue obtainable from petrol.
These are the reasons I submit to the Committee, and I would also reinforce what was said by the hon. Member for Linlithgow (Mr. Mathers), that one effect of the duty on light hydrocarbon oils is to stimulate the home-produced article, a matter which is not lost sight of. To sum up the arguments against the new Clause, in the first place the Committee are being asked to part with a great sum of Revenue, and, in order to get what Revenue is possible from the tax, to set up a heavy and troublesome control which might in the end be ineffective. They are asked to do all these things not to help industries which are distressed, but industries which are prosperous, and, at the same time, to make a definite breach in the integrity of the light hydrocarbon oil duty which has not been made by any Government since it was introduced in 1928.

9.54 p.m.

Major HILLS: I am very sorry that the Government are unable to accept the Clause. I regret it very much. I cannot let pass one or two of the arguments which my hon. and learned Friend advanced. I agree that you can obtain revenue from taxing raw material. No one would deny that; but do you want to get your revenue from taxing raw material? I should have thought that the Government would have agreed that the worst way of obtaining revenue was to put a tax on raw material. The last argument of my hon. and learned Friend was that because an industry is prosperous, it should not ask for relief from a duty which it considers works unfairly. It is in the prosperous industries where you can expect to get decent employment. Because an industry shows signs of good management and of doing


well, why should it be penalised? I have never heard that doctrine before. Because you show signs of wealth, you are to be taxed. I do not think that doctrine can be accepted. It has never been a principle of British taxation. I have never pretended that these industries are depressed. They are well managed, well run industries, and on the whole they are doing fairly well, but to

be told that because they are doing well their raw material should be subject to a tax which their foreign competitors do not pay is a doctrine that is new and that I have never heard before from the Financial Secretary to the Treasury.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 129; Noes, 206.

Division No. 244.]
AYES.
[9.57 p.m.


Acland, Rt. Hon. Sir F. Dyke
Graham, D. M. (Hamilton)
Morrison, Rt. Hon. H. (Ha'kn'y. S.)


Acland, R. T. D. (Barnstaple)
Green, W. H. (Deptford)
Morrison. R. C. (Tottenham, N.)


Adams, D. (Consett)
Greenwood, Rt. Hon. A.
Naylor, T. E.


Adams, D. M. (Poplar, S.)
Grenfell, D. R.
Oliver, G. H.


Adamson, W. M.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Owen, Major G.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Griffiths, G. A. (Hemsworth)
Paling, W.


Ammon, C. G.
Hall, G. H. (Aberdare)
Parker, J.


Anderson, F. (Whitehaven)
Hall, J. H. (Whitechapel)
Parkinson, J. A.


Attlee, Rt. Hon. C. R.
Hardle, G. D.
Potts, J.


Banfield, J. W.
Harris, Sir P. A.
Price, M. P.


Barnes, A. J.
Henderson, J. (Ardwick)
Pritt, D. N.


Barr, J.
Henderson, T. (Tradeston)
Rathbone, Eleanor (English Univ's.)


Batey, J.
Hills, A. (Pontefract)
Richards, R. (Wrexham)


Benson, G.
Hills, Major Rt. Hon. J. W. (Ripon)
Roberts, Rt. Hon. F. O. (W. Brom.)


Birchall, Sir J. D.
Holdsworth, H.
Roberts, W. (Cumberland, N.)


Broad, F. A.
Holland, A.
Robinson, W. A. (St. Helens)


Bromfield, W.
Jagger, J.
Salter, Dr. A.


Brooke, W.
Jenkins, A. (Pontypool)
Seely, Sir H. M.


Brown, Rt. Hon. J. (S. Ayrshire)
Jenkins, Sir W. (Neath)
Sexton, T. M.


Buchanan, G.
Johnston, Rt. Hon. T.
Short, A.


Cape, T.
Jones, A. C. (Shipley)
Sinclair, Rt. Hon. Sir A. (C'thn's)


Cassells, T.
Jones, H. Haydn (Merioneth)
Smith, E. (Stoke)


Charleton, H. C.
Kelly, W. T.
Smith, T. (Normanton)


Chater, D.
Kennedy, Rt. Hon. T.
Sorensen, R. W.


Cluse, W. S.
Kirkwood, D.
Stephen, C.


Cocks, F. S.
Lathan, G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Compton, J.
Law, R. K. (Hull, S.W.)
Strauss, G. R. (Lambeth, N.)


Cove, W. G.
Lawson, J. J.
Taylor, R. J. (Morpeth)


Cripps, Hon. Sir Stafford
Leach, W.
Thurtle, E.


Daggar, G.
Lee, F.
Tinker, J. J.


Dalton, H.
Leonard, W.
Vlant, S. P.


Davies, D. L. (Pontypridd)
Leslie, J. R.
Walkden, A. G.


Dobble, W.
Logan, D. G.
Watkins, F. C.


Dunn, E. (Rother Valley)
Lunn, W.
Watson, W. McL.


Ede, J. C.
Macdonald, G. (Ince)
Westwood, J.


Edwards, Sir C. (Bedwellty)
McGhee, H. G.
White, H. Graham


Evans, D. O. (Cardigan)
MacLaren, A.
Whiteley, W.


Fletcher, Lt.-Comdr. R. T. H.
Maclean, N.
Wilkinson, Ellen


Foot, D. M.
MacMillan, M. (Western Isles)
Williams, E. J. (Ogmore)


Gallacher, W.
MacNeill, Weir, L.
Williams, T. (Don Valley)


Gardner, B. W.
Marklew, E.
Wilson, C. H. (Attercliffe)


Garro Jones, G. M.
Messer, F.



George, Megan Lloyd (Anglesey)
Milner, Major J.
TELLERS FOR THE AYES.—


Gibbins, J.
Montague, F.
Mr. Muff and Mr. Burke.




NOES.


Adams, S. V. T. (Leeds, W.)
Bullock, Capt. M.
Critchley, A.


Agnew, Lieut.-Comdr. P. G.
Burghley, Lord
Crooke. J S


Albery, I. J.
Butler, R. A.
Crookshank, Capt. H. F. C.


Anderson, Sir A. Garrett (C. of Ldn.)
Campbell, Sir E. T.
Croom-Johnson, R. P.


Anstruther-Gray, W. J.
Cartland, J. R. H.
Cross, R. H.


Aske, Sir R. W.
Carver, Major W. H.
Crowder, J. F. E.


Balfour, G. (Hampstead)
Cary, R. A.
Cruddas, Col. B.


Balfour, Capt. H. H. (Isle of Thanet)
Castlereagh, Viscount
Culverwell, C. T.


Balniel, Lord
Chamberlain, Rt. Hn. N. (Edgb't'n)
Davies, Major G. F. (Yeovil)


Barclay-Harvey, C. M.
Channon, H.
Dawson, Sir P.


Beaumont, Hon. R. E. B. (Portsm'h)
Chapman, A. (Rutherglen)
De Chair, S. S.


Belt, Sir A. L.
Christle, J. A.
Denman, Hon. R. D.


Bernays, R. H.
Colfox, Major W. P.
Denville, Alfred


Blaker, Sir R.
Colville, Lt.-Col. D. J.
Dodd, J. S.


Blindell, Sir J.
Cooke, J. D. (Hammersmith, S.)
Dorman-Smith, Major R. H.


Bower, Comdr. R. T.
Cooper, Rt.Hn. T. M. (E'nburgh, W.)
Dower, Capt. A. V. G.


Boyce, H. Leslie
Courthope, Col. Sir G. L.
Duckworth, W. R. (Moss Side)


Brocklebank, C. E. R.
Craddock, Sir R. H.
Dugdale, Major T. L.


Brown, Col. D. C. (Hexham)
Cranborne, Viscount
Duggan, H. J.


Bull, B. B.
Craven-Ellis, W.
Duncan, J. A. L.




Eastwood, J. F.
Kirkpatrick, W. M.
Reed, A. C. (Exeter)


Eckersley, P. T.
Lamb, Sir J. Q.
Reid, Sir D. D. (Down)


Edmondson, Major Sir J.
Law, Sir A. J. (High Peak)
Reid, W. Allan (Derby)


Elliston, G. S.
Leckie, J. A.
Rickards, G. W. (Skipton)


Emmott, C. E. G. C.
Leech, Dr. J. W.
Robinson, J. R. (Blackpool)


Emrys-Evans, P. V.
Lewis, O.
Ropner, Colonel L.


Erskine Hill, A. G.
Llewellin, Lieut.-Col. J. J.
Ross Taylor, w. (Woodbridge)


Everard, W. L.
Lloyd, G. W.
Ruggles-Brise, Colonel Sir E. A.


Findlay, Sir E.
Locker-Lampson, Comdr. O. S.
Russell, A. West (Tynemouth)


Fleming, E. L.
Loftus, P. C.
Salmon, Sir I.


Fraser, Capt. Sir I.
Lovat-Fraser, J. A.
Salt, E. W.


Ganzoni, Sir J.
Mabane, W. (Huddersfield)
Samuel, M. R. A. (Putney)


Gledhill, G.
McCorquodale, M. S.
Sassoon, Rt. Hon. Sir P.


Gluckstein, L. H.
MacDonald, Rt. Hn. J. R. (Scot. U.)
Savery, Servington


Gower, Sir R. V.
MacDonald, Rt. Hon. M. (Ross)
Selley, H. R.


Graham, Captain A. C. (Wirral)
McKie, J. H.
Shaw, Major P. S. (Wavertree)


Grattan-Doyle, Sir N.
Macnamara, Capt. J. R. J.
Shaw, Captain W. T. (Forfar)


Greene, W. P. C. (Worcester)
Magnay, T.
Shepperson, Sir E. W.


Gretton, Col. Rt. Hon. J.
Maitland, A.
Shute, Colonel Sir J. J.


Gridley, Sir A. B.
Makins, Brig.-Gen. E.
Smith, Sir R. W. (Aberdeen)


Gritten, W. G. Howard
Manningham-Buller, Sir M.
Somervell, Sir D. B. (Crewe)


Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)
Margesson, Capt. Rt. Hon. H. D. R.
Somerville, D. G. (Willesden, E.)


Guinness, T. L. E. B.
Markham, S. F.
Spens, W. P.


Gunston, Capt. D. W.
Mason, Lt.-Col. Hon. G. K. M.
Stanley, Rt. Hon. Lord (Fylde)


Guy, J. C. M.
Mathers, G.
Stanley, Rt. Hon. Oliver (W'm'I'd)


Hanbury, Sir C.
Mayhew, Lt.-Col. J.
Stourton, Major Hon. J. J.


Hannah, I. C.
Mellor, Sir J. S. P. (Tamworth)
Strauss, E. A. (Southwark, N.)


Hannon, Sir P. J. H.
Mills, Major J. D. (New Forest)
Strickland, Captain W. F.


Harbord, A.
Mitchell, H. (Brentford and Chiswick)
Stuart, Hon. J. (Moray and Nairn).


Haslam, Sir J. (Bolton)
Moore, Lieut.-Col. T. C. R.
Sueter, Rear-Admiral Sir M. F.


Hellgers, Captain F. F. A.
Morgan, R. H.
Tasker, Sir R. I.


Heneage, Lieut.-Colonel A. P.
Morris, J. P. (Salford, N.)
Tate, Mavis C.


Hepworth, J.
Morrison, W. S. (Cirencester)
Taylor, Vice-Adm. E. A. (Padd., S.)


Herbert, Major J. A. (Monmouth)
Neven-Spence, Maj. B. H. H.
Touche, G. C.


Herbert, Captain S. (Abbey)
Nicolson, Hon. H. G.
Tryon, Major Rt. Hon. G. C.


Holmes, J. S.
O'Neill, Major Rt. Hon. Sir Hugh
Tufnell, Lieut.-Com. R. L.


Hope, Captain Hon. A. O. J.
Orr-Ewing, I. L.
Wakefield, W. W.


Hopkinson, A.
Palmer, G. E. H.
Walker-Smith, Sir J.


Hore-Belisha, Rt. Hon. L.
Patrick, C. M.
Wallace, Captain Euan


Horsbrugh, Florence
Peake, O.
Ward, Lieut-Col. Sir A. L. (Hull)


Howitt, Dr. A. B.
Penny, Sir G.
Waterhouse, Captain C


Hudson, Capt. A. U. M. (Hack., N.)
Perkins, W. R. D.
Wells, S. R.


Hudson, R. S. (Southport)
Petherick, M.
Williams, H. G. (Croydon, S.)


Hume, Sir G. H.
Pickthorn, K. W. M.
Winterton, Rt. Hon. Earl


Hunter, T.
Pownall, Sir Assheton
Womersley, Sir W. J.


Inskip, Rt. Hon. Sir T. W. H.
Radford, E. A.
Young, A. S. L. (Partick)


James, Wing-Commander A. W.
Raikes, H. V. A. M.



Jones. Sir G. W. H. (S'k N'w'gt'n)
Rankin, R.
TELLERS FOR THE NOES.—


Jones, L. (Swansea, W.)
Rathbone, J. R. (Bodmin)
Commander Southby and Dr.


Kerr, J. Graham (Scottish Univs.)
Rayner, Major R. H.
Morris-Jones.


Motion made, and Question, "That this Schedule, as amended, be the Fourth Schedule to the Bill," put, and agreed to.

NEW CLAUSE.—(Extension, of 21 and 22 Geo. 5. c. 28, s. 40, to land given to National Trust for Scotland.)

In section forty of the Finance Act, 1931 (which provides for exemption from Death Duties in the case of land given to the National Trust), the expression "National Trust" shall include the body incorporated under the National Trust for Scotland Order Confirmation Act, 1935, by the name of "The National Trust for Scotland for Places of Historic Interest or Natural Beauty:"

Provided that, in relation to the said body, the reference in the said section forty to the commencement of the Finance Act, 1931, shall be construed as a reference to the passing of this Act.—[Mr. Erskine Hill.]

Brought up, and read the First time.

l0.7 p.m.

Mr. ERSKINE HILL: I beg to move, "That the Clause be read a Second time."
The object of the new Clause is to extend to the National Trust of Scotland

the same facilities for relief from Death Duties as are at present enjoyed by the English National Trust. Under Section 40 of the Finance Act, 1931, which applies only to the English National Trust, any interest or estate in land which has been given or bequeathed to the National Trust of England may be exempted by the Treasury from the payment of Death Duties. The concession is not one which may mean much to the Treasury, but it is very valuable so far as the National Trust is concerned, as a very much greater burden would be put on the English National Trust if they did not get his relief from Death Duties. The object of the new Clause is to apply Section 40 to the Scottish National Trust as well. It is well known that the object of the National Trust is to conserve for the country places of national interest and natural beauty. That is an object which will appeal to every hon. Member, and I believe that every hon. Member


will also agree that the same facilities should be given to the Scottish National Trust as are given to the English National Trust. I am informed that it will not mean a every great charge on the Treasury.

Mr. PETHICK-LAWRENCE: I hope the Chancellor of the Exchequer will grant this concession. It is only right and reasonable that the beneficial effects in regard to the English situation should be extended to Scotland.

Mr. CHAMBERLAIN: The Scottish National Trust was not in existence at the time the legislation was passed which gave this special privilege to the English National Trust. Now it has the same powers and the same duties as the English National Trust, and it seems reasonable that it should have the same privileges. I shall be happy to accept the new Clause.

Clause added to the Bill.

NEW CLAUSE.—(Provisions as to glass houses.)

In paragraph 2 of Rule 5 of the Rules applicable to cases I and II of Schedule D, the word "glasshouses" shall be inserted after the word "Factories."—[Sir M. Sueter.]

Brought up, and read the First time.

10.10 p.m.

Rear-Admiral Sir MURRAY SUETER: I beg to move, "That the Clause be read a Second time."
Under the existing provisions of the law the general rule is that only the net annual value may be deducted for the purposes of assessing annual value, but Rule 5 of the Schedule provides that in the case of certain premises being mills, factories or other similar premises, the gross annual value shall be deducted, and we desire to extend this privilege to glasshouses. Certain factories are given this concession, I understand, because they have machinery which causes vibration, and the buildings deteriorate very much because of that. The owners of these factories have benefited by the concession, and I submit that it should be extended to glasshouses.
We have more glasshouses in my constituency than in any other part of the country. They are peculiar buildings.

They are largely erected on a brick wall, then have longitudinal pieces of wood, a certain amount of glass and then a, large span of roof, of light wood, carrying the glass. These great roofs are subjected to rain, frost, hail and snow, and when they are well saturated are exposed to the heat of the sun. External temperatures are always varying, but the internal temperature has to be kept fairly high for the production of roses, cucumbers, tomatoes and so on. These variations of temperature cause the buildings to deteriorate very rapidly, and the life of these structures is not a very large number of years. They deteriorate after some 20 years, and however careful you may paint them every year you find that insects and other things get into the wood as well as the walls, and you get bare patches in the wood. When everything is taken into consideration these glasshouses do not last for more than 25 years.
They cost about £3,000 to erect, and when they are scrapped you do not get more than £500 or £600 for them. That is a dead loss to the grower. I submit that we should help these growers as much as possible. We want to increase the production of tomatoes, as they are good for everybody to eat. In the Navy we give the men tomatoes, and I can thoroughly recommend them. There is a slogan, "Eat more fish," but I should say "Eat more tomatoes." Tomatoes contain the necessary vitamins for making pale people red. I submit that there might be many hon. Members who would benefit by eating more tomatoes. In the Lea Valley we grow the most succulent tomatoes there are in the world. I have eaten tomatoes in many other countries, but in my constituency we really grow the very best tomatoes. I would ask the Chancellor of the Exchequer carefully to consider whether he cannot help the growers. These men ought to be encouraged. We want to produce as many tomatoes as we can in this country and not have to rely on tomatoes coining from foreign countries. If we could grow all we want in this country, it would relieve the shipping of the country if an emergency arose. I ask that this small concession should be made to help the growers in my constituency and in other constituencies. They have worked hard to start this new industry and they deserve every consideration.

10.17 p.m.

Mr. W. S. MORRISON: The particular allowance which my hon. and gallant Friend wishes to have applied to glasshouses, in addition to mills and factories, is one which was granted to mills and factories because of the additional depreciation of those buildings which arose from the vibration of the machinery used in them. I am sure the Committee is willing to credit the constituents of my hon. and gallant Friend with very high proficiency in the art of horticulture in these glasshouses, but I do not think they have arrived at such a high pitch of perfection that the produce grows with such speed that the vibration caused shakes the glasshouses to pieces. It is obvious that the reason for the allowance being made in the one case is not appropriate to the other. There is, however, an allowance given to the owners of glasshouses which is a very important one and which more than takes the place of the allowance for which my hon. and gallant Friend is asking. A man who has glasshouses is allowed at the present time to charge the actual cost of repairing the perishable part of a glasshouse as a trade expense, and I think the Committee will agree with me that that is a very fair and just allowance.
Apart from the considerations I have advanced that the allowance was intended for an entirely different sort of industry than the one which the hon. and gallant Member has been good enough to describe to us to-night, it would be impossible to grant this vibration allowance—if I may so call it—to glasshouses. If it were given in the case of such a peaceful structure as a glasshouse, it would be impossible to refuse it in the case of all sorts of other buildings, and what the cost would then be I am not able to say. The Royal Commission on Income Tax, which sat in 1920, considered the whole question of extending the relief granted to one section of taxpayers to other sections, and paragraph 222 of the report definitely states:
We are opposed to the extension to other classes of buildings of the allowance for depreciation of mills and factories.
In view of the considerations I have put before the Committee, I venture to suggest that is a sound conclusion. Therefore, I ask the Committee not to give this proposed Clause a Second Reading.

Sir M. SUETER: Surely this concession in the case of mills and factories was made before glasshouses were being built in such great quantities as they are now. This is an expanding industry and I do not think that the question of vibration alone ought to be considered in this connection. I was making out a case in connection with the effects of weather variations and variations of temperature. These glass roofs are subject to variations of external temperature in conjunction with the internal temperature. No factory buildings are constructed in the same way as these, because factories are built with steel supports, whereas these structures have supports of light wood which deteriorate very quickly. I ask my hon. and learned Friend to consider this matter more carefully and to give me, at any rate, some hope of a concession in the near future.

Mr. G. GRIFFITHS: If the hon. and gallant Member's constituents get this concession, will they pass it on to the consumer because I want cheaper tomatoes?

Sir M. SUETER: They will pass it on to the consumer, and they will also give more employment.

Sir R. W. SMITH: My hon. and learned Friend said that this relief was given to factories in respect of vibration. If it can be proved that there is no vibration in a particular factory does that factory receive no relief?

10.22 p.m.

Mr. W. S. MORRISON: That would involve the application of a very expensive test. The procedure is that factories are deemed eligible to receive this allowance on the assumption that they will suffer from vibration which in the great majority of cases causes depreciation. I venture to suggest to my hon. and gallant Friend that the other kind of depreciation to which he referred, due to changes of weather and temperature, are met by the provision enabling those repairs to be treated as trading expenses.

Sir M. SUETER: Would not contraction and expansion have much the same effect as vibration?

Question, "That the Clause be read a Second time," put, and negatived.

First Schedule (Iron and steel goods in respect of which orders may be made removing or reducing additional duties) agreed to.

SECOND SCHEDULE.—(Supplementary pro visions as to prevention of avoidance of income Tax by transactions re sulting in the transfer of income to persons abroad.)

10.23 p.m.

Mr. FOOT: I beg to move, in page 30, line 10, at the end, to insert:
and where any income deemed to be the income of an individual by virtue of the principal section has already been charged to income tax or borne income tax by deduction in the hands of a person resident or domiciled out of the United Kingdom it shall not be liable to be charged to income tax again as income of the individual by virtue of the principal section.
The purpose of paragraph 3 of the Schedule will no doubt commend itself to the Committee. It is to prevent a taxpayer who is affected by Clause 16 from being taxed twice over. The paragraph states that if the income which is deemed to be his has borne tax before he received it, he is not required to pay tax on it after he has received it. The Amendment seeks to carry the matter a stage further and to deal with a slightly different point. Suppose that the income has borne tax in the hands of a foreigner. In spite of that, it will be deemed, under Clause 16, to be the income of the British subject concerned. Might it not well be the case that that income would have to bear tax twice over—once when it was in the hands of the foreigner and once when it was deemed to be in the hands of the British subject. To give an example, suppose that a foreigner derived income from shares in the Imperial Tobacco Company. That income will have borne British Income Tax by deduction at source, before it reaches the hands of the foreigner. If the actual dividend which the foreigner received was deemed to be the income of the British subject under Clause 16, might it not then be that the British subject would still be required to pay Income Tax on that amount? I am not quite certain that this point is covered by paragraph 1 of this Schedule, and I should be grateful if the Minister would deal with the point.

10.26 p.m.

The ATTORNEY - GENERAL (Sir Donald Somervell): The point is covered

by the opening words of paragraph 1, which state:
Tax at the standard rate shall not be charged by virtue of the principal section in respect of income which has borne tax at the standard rate by deduction or otherwise.
Those words seem to me exactly to meet the point which the hon. Member put. The words which he has put on the Paper would, in fact, prevent any assessment being made in respect of Surtax, the object of Clause 16 being, of course, to see that Surtax assessment should be made on individuals who would not be otherwise liable.

10.27 p.m.

Mr. FOOT: It seemed to me that perhaps it was not entirely covered by paragraph 1, because surely it all depends on the point of time at which the income becomes deemed to be that of the British subject; but if the Attorney-General is certain that this point is covered, I, of course, accept that assurance and ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.28 p.m.

Mr. SPENS: I beg to move, in page 30, line 24, to leave out paragraph 6.
This matter was discussed at some length on Clause 16 as to the desirability of there being a reference from the Special Commissioners, after they had dealt with the matter, to the Board of Referees. The Committee will remember that in order to get out of the Section the Committee decided that each person should have to establish to the satisfaction of the Special Commissioners that he had made one of these transfers for a, purpose other than that of avoiding tax. The Special Commissioners are to go into that question and to come to a decision of fact, one way or the other, and this paragraph in the Schedule then provides that either party may have the same thing done over again by the Board of Referees. From the point of view of the subject, it appears to me that there is not a body which enjoys such enormous public confidence as the Special Commissioners, and if in connection with tax cases we make it possible for the subject to go through the same procedure over again with the Board of Referees, that is really to involve the subject in a great deal of expense, and I do not


think it gives the subject any protection which he needs, having regard to the extraordinary public confidence in the Special Commissioners.

10.30 p.m.

The ATTORNEY-GENERAL: My right hon. Friend inserted this provision, giving the right of appeal on a question of fact, as a protection to the taxpayer. It was felt that in the circumstances it might be right to give a possibility of review on this question of fact by a tribunal other than the Special Commissioners. My right hon. Friend is, of course, aware of the arguments which are advanced on the basis that every fresh hearing involves fresh cost. He is also aware of the great confidence which is felt in the Special Commissioners and the decisions they give on questions of fact. My right hon. Friend does not think it right to accept the Amendment at this stage because he thinks there should be an opportunity for people to make representations to him, should they have relied on what he said and, in fact, regarded the question of right of appeal as one of value. He will undertake to reconsider the matter before the Report stage if the representations made to him support the view of my hon. and learned Friend that on the whole people would rather that this matter should be left, together with other questions of fact, to be decided by the Special Commissioners and, if necessary, he will take appropriate action at a later stage.

10.32 p.m.

Mr. FOOT: The concluding words of this paragraph are
when any question is so referred the board shall proceed to hear and determine the question and their determination thereon shall be final.
In paragraph 8 there is a provision for appeal by way of case stated to the High Court from the referees. Is it intended that when the Board of Referees have given a decision under paragraph 6, there will still be an appeal to the High Court under paragraph 8?

The ATTORNEY-GENERAL: Paragraph 8 states:
notwithstanding anything in the foregoing provisions,
and the intention is, I think, quite clear that, on the Schedule as it stands, there is an appeal on questions of fact to the Board of Referees. Their decision will

be final. If, having got to that stage, the taxpayer has a point of law that he desires to take, he can take it from the Board of Referees by means of case stated, just as he could have taken it in the first instance from the Special Commissioners by way of case stated.

10.33 p.m.

Sir S. CRIPPS: I am not very interested in the Amendment, but I am rather alarmed at what the Attorney-General has said. As I understood him, he said that the Chancellor of the Exchequer was not prepared to make up his mind on this Amendment until he had had representations from someone. Surely the place where this should be discussed is the Committee of the House of Commons. The idea that the Finance Bill should be framed in discussions between the Chancellor and some undefined persons outside seems to me to hit at the very root of House of Commons control. The Chancellor should listen to the opinions that are put forward here by informed persons who, after all, represent the public, and to say that, having heard the case put forward by representatives of the public in this Committee, he is not prepared to make up his mind, but is going to consult someone else or get representations from some other body outside, seems to be a most monstrous suggestion as regards the control of this House on matters of finance.
I hope that the Chancellor will tell us from whom he is expecting to get representations. Who is going to be able to cause him to change his mind when speeches in this Committee cannot cause him to change his mind? That is the point. The hon. and learned Member for Ashford (Mr. Spens) has—whether I agree with him or disagree with him—put forward a point of view, and it is now open for discussion in this Committee, but we are told that the Chancellor is not prepared to decide the matter on discussion in this Committee but is going outside this Committee to get representations from some other body, who I do not know—

The ATTORNEY-GENERAL: I never said the Chancellor of the Exchequer was going to others outside the Members of the Committee.

Sir S. CRIPPS: Certainly.

The ATTORNEY-GENERAL: No. I said representations made to him by Members of the House. It is getting on towards the end of the evening, but Members who heard my right hon. Friend's earlier statement will agree with me, I think, that it is an extraordinary doctrine to say that a Minister cannot indicate a provisional intention subject to what Members of the House or others may put before him.

Sir S. CRIPPS: This seems almost worse. What is this Committee for, except to discuss this problem? If Members do not care to attend, what right have they, after the discussion, to go to the Chancellor in his roam and put forward their views in private? The whole object of this Committee is to have a public discussion of these matters, to know that the Chancellor is being Influenced by speeches made in public and not by some hole-and-corner conversations which take place outside this Chamber altogether. I hope very much that the Chancellor will tell us that he is not going to be swayed by some discussion taking place outside the Chamber in a matter which is essentially and primarily one for decision by this Committee. If the Chancellor says that he wishes to think over what has been said in this Committee, that he is not prepared to announce a decision at the moment, that is quite a different matter. But if he is going to say that what he has heard in this Committee is not sufficient to persuade him, but that he will take an opportunity of chatting with his friends outside, other Members of the House who are not interested enough to attend the proceedings, I venture to suggest that an extremely dangerous precedent is being set up, which is going to undermine the authority of this Committee. Members will say: "It is not worth attending the Committee and discussing the matter there. We will go to see the Chancellor to-morrow." We shall then get an even more depleted Committee than we have to discuss these important matters.

10.38 p.m.

Major HILLS: Any charge more unjust against the Chancellor than that of refusing to listen to this Committee I have never heard. Anyone who sat through the long discussion on Clause 19 must know that nobody could have been

more courteous and ready to listen to suggestions publicly made in this Committee than the Chancellor of the Exchequer and the Attorney-General. Every suggestion was considered, there was a very full discussion, and the Chancellor promised to weigh all the Amendments, which had been moved publicly. It was no hole-and-corner matter, as the hon. and learned Gentleman said.

Sir S. CRIPPS: The right hon. and gallant Gentleman will excuse me. I have never suggested that the Chancellor has not listened attentively, but what I am objecting to is the Attorney-General saying that the Chancellor will not make up his mind until he has consulted with people outside the House.

Major HILLS: I did not hear the Attorney-General say that.

Sir S. CRIPPS: Well, you will see it in the OFFICIAL REPORT.

Major HILLS: To my imperfect brain he appeared to say that the Chancellor would listen to what was said in this House. [HON. MEMBERS: "NO."] I think that is so. I speak in the recollection of the Committee. Throughout the whole of the proceedings of the Committee the Chancellor has shown conspicuous courtesy to the Committee, with every wish to hear all the suggestions which have been made. I want to ask one question of the Attorney-General. No tribunal stands higher in repute than the Special Commissioners, but for some reason, I do not know why, the Board of Referees are not liked; they are not popular. I have come across them only once, and then I was not putting my own case but somebody else's. I did not get the decision I liked, so perhaps I am prejudiced. Is it not best to make the taxpayer go to the Special Commissioners, with an appeal to the High Court? I think that would be better.

10.41 p.m.

Mr. CROOM-JOHNSON: I confess that I did not understand the Attorney-General in the same way as did the hon. and learned Member for East Bristol (Sir S. Cripps). I understand the situation to be that as the right hon. Gentleman the Chancellor of the Exchequer had not been convinced by the arguments put before him he was prepared to give an opportunity to people to make repre-


sentations to him. I cannot see what is wrong in that procedure. The matter is, after all, not new. I raised it two or three years ago upon the discussion of the Finance Bill at that time, and, so far as I can gather, in the intervening period the general feeling about the retention of the Board of Referees has not grown any less, and there is, in fact, a strong feeling that they are an unnecessary tribunal. We have been engaged, through legislation in this House in the last two years or so, in getting rid of unnecessary tribunals, with the object of saving expensive litigation and cutting down unnecessary appeals by one side or the other. How much more should we attempt to cut down unnecessary appeals when on the one side you have the taxpayer and on the other side the whole force, energy and resources of the State? I hope that these matters will be given, and I am sure they will be, due consideration, and I thank the Chancellor of the Exchequer for the statement that has been made on his behalf.

10.43 p.m.

Mr. A. SOMERVILLE: The Attorney-General spoke of the board and the taxpayer. As a matter of fact, the decision of the Board of Referees has been almost invariably against the taxpayer. May I be allowed to express surprise at the hon. and learned Member for East Bristol (Sir S. Cripps) coming forward as a defender of the rights of the House of Commons, when he is in favour of a House of Commons in which there will be a Government of which he will be a Member, and which will be invested by that House with dictatorial powers, which Government will send Members of the House of Commons back to their constituencies—

The DEPUTY-CHAIRMAN: Order!

10.44 p.m.

Mr. SPENS: The Attorney-General has said that the Chancellor of the Exchequer will consider the matter, and therefore I shall ask leave to withdraw the Amendment; but before I actually do so, may I make this suggestion? If it be established with the Board of Referees under this Section, which has been introduced on behalf of the taxpayer, that the onus is on the taxpayer to prove that he is not avoiding the tax, then the right of appeal for re-hearing to the Board of Referees should be confined

to the taxpayer. It does not seem quite fair to put the burden on the taxpayer to prove his case to the Special Commissioners, and that the Inland Revenue Commissioners should then have the right to make him do it the second time to the Board of Referees. That right ought ordinarily to be reserved for the taxpayer. Subject to those remarks in regard to procedure, I beg to ask leave to withdraw the Amendment.

HON. MEMBERS: No!

Amendment negatived.

10.45 p.m.

Mr. FOOT: I beg to move, in page 30, line 28, after "does," to insert" or does."
This is a mere point of wording. I only put it forward because I was puzzled lay the way in which the paragraph is worded. I understand that the Government are prepared to accept the Amendment.

The ATTORNEY-GENERAL: My right hon. Friend desires to advise the Committee to accept this Amendment, as it will clarify the sense.

Amendment agreed to.

10.46 p.m.

Mr. FOOT: I beg to move, in page 31, line 12, to leave out from "Schedule," to "they," in line 14.
The words which I am moving to leave out are these:
or if the Special Commissioners are not satisfied with any particulars furnished under this Schedule.
In order to appreciate the point of this Amendment, it is necessary to look at the provisions both of paragraph 9 and of paragraph 10. By paragraph 9 the Special Commissioners may require the taxpayer to furnish such particulars as they think necessary for the purpose of the principal Section. If those particulars—and, of course, they may require such particulars as they wish—are not furnished, the taxpayer is liable to a penalty. By paragraph 10, if the particulars are not furnished, the Commissioners have further power to make an estimate, and then, of course, the amount which the taxpayer will have to pay will be based on that estimate. I should have thought that these by themselves were sufficiently wide powers to be given to any public body,


but paragraph 10 goes rather further, because it says that, if the Commissioners are not satisfied with the particulars furnished under the Schedule, again they may make an estimate, which, of course, may bear no sort of relation to the facts, that is to say, to the actual income of the taxpayer. As I read the paragraph, they are made the sole judges, first, of what particulars are necessary; and, secondly, of whether the particulars furnished are satisfactory; and there is no appeal from their decision.
If they get their particulars in the first place, they can, of course, use them as the basis of the assessment. If they do not, they have two alternatives—they can impose a penalty, or they can make an estimate without having the particulars before them. I submit that these powers by themselves are perfectly sufficient for the purposes of the Special Commissioners. But the provisions go further, and in my submission it is going much too far to say in effect that, having got those particulars—that is to say, any particulars they may require—they may then disregard them because they are not satisfactory, and may fix the amount to be paid at an entirely arbitrary figure.

10.50 p.m.

The ATTORNEY - GENERAL: The power which the hon. and learned Member has criticised is similar to the power already contained in Section 44 (3) of the Finance Act, 1927, which deals with failure to make a return for Surtax purposes and gives the Special Commissioners this power if they are not satisfied with the return made. There are a few other cases where this power is given. It is a proper power, and if the Amendment was carried, however obviously inaccurate or inadequate the answer was that the taxpayer was required to furnish this power could not be exercised. My hon. and learned Friend said there was no appeal. He is labouring under a misconception. An estimated claim under this paragraph becomes an assessment and the taxpayer has all the rights of appeal that he has in the case of an assessment in the ordinary course.

Mr. FOOT: Surely there is no appeal on the specific question whether the particulars demanded are reasonable or not.

The ATTORNEY-GENERAL: No, but the position of the taxpayer is fully safe-

guarded if he has the same right of appeal to the Special Commissioners to review the facts. There should be this power to cover cases where the particulars furnished have been obviously inadequate or inaccurate. These powers have been in existence in other cases for a number of years, there have been no complaints as to their use and I would ask the hon. and learned Gentleman to consider whether he cannot see his way to withdraw the Amendment.

Amendment negatived.

Third Schedule agreed to.

FOURTH SCHEDULE.—(Miscellaneous enactments repealed.)

Mr. KIRKPATRICK: I beg to move, in page 34, line 6, at the end, to insert:


10 and 11 Geo. V., c. 18
The Finance Act, 1920
As from the first, day of January, nineteen hundred and thirty-seven, paragraph 2 of the Second Schedule

Mr. MORRISON: This Amendment is consequential on the other Amendment in the name of the hon. Member, and I accept it.

Amendment agreed to.

Bill reported; as amended, to be considered upon Monday next, and to be printed. [Bill 136.]

Orders of the Day — POST OFFICE (SITES) BILL [Lords].

Read a Second time.

Bill committed to a Select Committee of Seven Members, Four to be nominated by the House and Three by the Committee of Selection:

Ordered,
That all Petitions against the Bill, presented at any time not later than five clear days after the Second Reading of the Bill, be referred to the Committee:

Ordered,
That Petitions against the Bill may be deposited in the Committee and Private Bill Office, provided that such Petitions shall have been prepared and signed in conformity with the Rules and Orders of this House relating to Petitions against Private Bills:

Ordered,
That the Petitioners praying to be heard by themselves, their Counsel, or Agents be heard against the Bill, and Counsel or Agents heard in support of the Bill:

Ordered,
That the Committee have power to send for persons, papers, and records:

Ordered,
That three be the quorum."—[Major Tryon.]

The remaining Orders were read, and postponed.

Orders of the Day — ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Sir A. Lambert Ward.]

Adjourned accordingly at Three Minutes before Eleven o'clock.